Michelin buys Scottish online tyre retailer Blackcircles for £50m

French tyremaker Michelin has snapped up Blackcircles.com, a small Scottish online tyre company, for £50m, as it looks to boost its online offering for consumers.

The company, which is based in Peebles, was launched in 2001 and counts former Tesco chief executive Sir Terry Leahy as its second largest shareholder, with a 25 per cent stake. Last year he also joined the board.

Blackcircles sells tyres online that are then fitted by franchises or independent garages. It has a network of over 1,200 tyre fitting centres and last year sold about 335,000 tyres in the UK.

Mike Welch, chief executive of Blackcircles, who set up the company when he was 22 and owns a third of the business, will remain with the company following Michelin's acquisition.

"We want to challenge the big retail names and the reality is we will get there a lot faster and Blackcircles will be a big name quicker with a partnership with Michelin than it would without," said Mr Welch.

Blackcircles's sales grew by 20 per cent to £27.8m in 2013, while earnings before interest, tax, depreciation and amortisation increased from £600,000 to £1m. The company employs 50 staff.

For Michelin, the purchase will help boost its online strategy. Last month, it announced the acquisition of a 40 per cent stake in Allopneus, a French online tyre company, for €60m. The Aix-en-Provence-based company, which runs a similar business model to Blackcircles, sold about 3m tyres in France in 2014, and accounts for 7 per cent of the French market.

"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," said Jean-Dominique Senard, chief executive of Michelin.

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