Les Schwab Looks for Growth Through Buy-Outs
Les Schwab Tire Centers' upcoming acquisition of Plains Tire Inc., a nine-store chain with locations throughout Wyoming, signals an emphasis on growth through acquisition for the Bend, Ore.-based dealership.
The deal, announced earlier this week, is scheduled to close in August and expands Les Schwab’s presence in Wyoming to 10 locations. (Les Schwab opened its first store in the state during 2019.)
Terms have not been disclosed.
The Plains Tire locations were owned by Larry Nicholls and were part of his Logan, Utah-based Associated Tire Stores Inc. group, which also includes Bargain Tire and Discount Tire and Automotive, both of which will remain under the ownership of the Nicholls family.
Nicholls says that being part of Les Schwab “will create even more opportunity for our people and I know our employees, customers and communities will be well cared for.
“I don’t believe I could have found a better partner than Les Schwab to sell our family’s company to and I’m excited to watch these stores grow and flourish.”
The Plains Tire acquisition “puts us as far east as some of our Montana and Colorado stores,” says Dale Thompson, Les Schwab’s chief marketing officer. “It kind of fills in that eastern front.”
In addition to Wyoming, Montana and Colorado, Les Schwab also operates stores in its native Oregon, as well as Washington, Idaho, California, Nevada, Utah and Alaska.
Plains Tire has outlets in Laramie, Rock Springs, Gillette, Evanston, Casper, Sheridan, Riverton and Green River, Wyo.
‘An established player’
Thompson says Les Schwab will continue to open new stores, but also will pursue acquisition opportunities.
He notes that the company has acquired Les Schwab member-dealer stores over the years. (The company has nearly 55 member-dealer locations.)
“But we’ve been doing a lot more organic greenfield growth in the last 10 to 15 years.”
Schwab itself was acquired by Meritage Group LP, a California-based investment company, in September 2020.
“We’ve always looked for growth opportunities and historically have been more greenfield. Why not (do) acquisitions, as well as greenfields?
"And that’s what we’re doing. We’re looking at both avenues right now.”
There are several advantages to entering a new market by acquiring an existing dealership, according to Thompson.
“When we looked at Wyoming, we had one store there. Now we have 10, so speed is an advantage. I also think when you look at our (recent entry into) the community, it makes things difficult when it comes to zoning.”
With Plains Tire, “we have an established player in the marketplace. And I think also established reputation versus starting from scratch and brand building … that would be one of the bigger advantages.”
A decision has not yet been made regarding Plains Tire’s branding, moving forward.
“We’re going to run them as they are and look for how to best integrate the two (dealerships’) systems and that’s our plan,” says Thompson.
The companies’ share the same philosophy when it comes to customer service, employee relations and community engagement, he adds. “That kind of alignment with our strategy creates a very good fit and what we think is a tremendous opportunity.”
When asked about future acquisitions, Thompson declined to comment on specifics, but mentioned that Les Schwab is “looking for well-run, highly respected companies that align with our strategy: a strong brand, well-respected with the community - those are the things we think align well with us.”
The Plains Tire acquisition gives Les Schwab 453 company-owned outlets, making it the fifth largest independent tire dealership in the U.S., according to the 2021 MTD 100, which appears in the July issue of MTD.
Les Schwab, who was MTD’s Tire Dealer of the Year Award winner in 2000, founded the company in 1952.