Tyre giant Michelin buys Scots firm for £50m

French tyre giant Michelin has bought the Edinburgh-based internet tyre sales company Blackcircles.com for £50 million.

Blackcircles.com generated £28 million in revenue in 2013 and has experienced growth of around 20 per cent per annum since 2008, thanks largely to its ‘Click and Fit’ formula, which includes the sale of the product and the service.

In the first quarter of 2015 revenues were up 34 per cent compared to Q1 2014.

The deal will mean a multi-million pound windfall for founder, Mike Welch as well as for former Tesco boss Sir Terry Leahy, who is a major shareholder and joined the board of the Peebles-based business in March last year.

Leahy is understood to have a 25 per cent stake in the business, which was set up by Welch in 2001.

Blackcircles also counts former Kwik-fit finance director Graeme Bissett as its chairman.

Founder and CEO Mike Welch, 36, who was named as Scotland’s emerging entrepreneur of the year by Entrepreneurial Scotland last year, intends to stay with the Peebles company and continue to grow it.

He said: “I’m delighted to have found in Michelin a partner who shares our passion for customer service, innovation and technology.

“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.”

Michelin said that the acquisition of Blackcircles.com will enable it to improve the performance of its mix of distribution channels in the UK and in particular, to develop synergies with its traditional distributor, ATS Euromaster.

It follows the acquisition in mid-April of a 40 per cnet stake in Allopneus, the French online tyre sales company, and is part of Michelin’s e-commerce strategy.

Jean-Dominique Senard, CEO of the Michelin Group, said: “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.”