Black Circles sold to Michelin for £50m
One of Scotland's most successful entrepreneurs has sold his tyre-fitting business for £50m to Michelin.
Mike Welch, chief executive of Blackcircles.com, can expect to gain a third of that sale price, while staying with the company.
He started selling tyres aged 16 before joining Kwik-Fit.
Aged 21, he set up Black Circles, basing it in Peebles, where it employs 50 people.
Welch, now aged 36, built it up to annual sales in 2013 of £28m, with annual growth of around 20% per year since 2008. The first three months of this year have seen revenue rise by 34% on the same period last year.
The company developed a "click and fit" business model. Customers choose their tyres online, they are then delivered directly from manufacturers to one of 1,350 independent garages, where the customer then books in a tyre-fitting session.
According to the chief executive, prices undercut conventional sales by 20%-to-40%.
In March, the company announced that it was looking at ways to extend its growth, including a float on a stock exchange, private equity investment, or a sale.
It recruited former Tesco boss Sir Terry Leahy onto the board, to use his expertise in retail. There is also a trial of a Blackcircles fitting service at some Tesco superstores.
The Michelin deal opens up expertise and a much wider distribution network, without limiting Blackcircles.com to the parent company's brand products.
Michelin already owns the conventional tyre distributor ATS Euromaster, and the French firm hopes there will be synergies between the two distributors, although Blackcircles.com will continue to operate independently within the Michelin group.
"I'm delighted to have found in Michelin a partner who shares our passion for customer service, innovation and technology," said Mr Welch. "The strength of the Michelin Group will allow us to underpin the multi-brand offering that we deploy in each garage, on every street corner.
"I am convinced that our teams, our customers, our garages and our suppliers will rapidly start to see the benefits of this partnership."
Jean-Dominique Senard, chief executive of the Michelin Group, commented: "Our strategy illustrates our ambition: to be ever more innovative, efficient and proactive for our customers by offering them products and services suited to individual needs, and by simplifying the entire purchase process, from choosing their tyres to having them fitted by professionals."
Michelin has 68 production plants in 17 countries, and employs 117,000 people.
An interview with Mike Welch can be heard on Business Scotland this weekend - at 06:00 on Saturday and 07:30 on Sunday - on BBC Radio Scotland.