BEND, Ore. – Les Schwab, the tire powerhouse known for its customer service, company culture and – once – its fierce commitment to keeping the business in the family, is considering a sale.
The Oregonian/OregonLive reports the privately held company on Tuesday confirmed it had hired Goldman Sachs to find a buyer. It didn’t disclose a potential buyer or expected price tag.
Bloomberg News reported earlier that the company expected it could fetch a price of at least $3 billion. The report, attributed to people with knowledge of the matter who asked not to be identified because of the deal’s privacy, said that the company is working with an adviser as it weighs alternatives including divesting its real estate portfolio.
It’s a historic, and surprising, move for the business. Long after Les Schwab founded his eponymous company in 1952, he made it clear that he had no interest in passing control of the company to anyone outside his family.
“This company isn’t for sale,” he told The Oregonian in 1997. “It will go on, bigger and better than ever and continue to provide opportunities for young people to be successful. All the stock will remain in our family.”
In step with his desire to keep the business family-owned, Schwab rebuffed offers over the years from French tire magnate Francois Michelin and billionaire investor Warren Buffet.
Schwab reckoned with the fate of the business and its ownership when, in 2006, his daughter Margie Denton passed away after a long battle with cancer. Schwab’s son Harlan had died in a 1971 car crash.
The loss of his second child devastated Schwab, and it also forced him to re-evaluate the future of the company. Until Denton’s death, the tire baron had trained his daughter, a board member and active participant in the family business, to take the reins when he stepped down.
Denton had also pledged to keep the business in the family, at least through her generation.
The responsibility of the business would fall to Schwab’s four grandchildren, who weren’t as active in the business as their parents and grandparents.
The family shareholders said in a statement Tuesday that the decision to sell, made “from a position of strength,” would help ensure the company’s longevity.
“Given the complexities of a fifth-generation family business, and managing a company of our size, we are at an important point in the life of Les Schwab Tire Centers,” they wrote. “As our family grows and ages, it is increasingly critical to us that ownership remain committed and aligned behind our grandfather’s vision.”
Now led by Chief Executive Officer Jack Cuniff, the company has $1.8 billion in annual revenue, according to a November 2018 interview with the Bend Bulletin. Les Schwab operates 492 locations across 10 states, including Washington, Oregon and California.
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