Blackcircles bought by Michelin for £50m

The deal will also deliver a bumper payout for former Tesco boss Sir Terry Leahy, a major shareholder who joined the board of the Peebles-based business in March 2014.

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.

Announcing the deal yesterday, Welch said: “I’m delighted to have found in Michelin a partner who shares our passion for customer service, innovation and technology.”

He added: “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.”

Welch left school at 16 to become a tyre fitter in Liverpool and launched his first tyre business in his teens before being headhunted by Kwik-Fit and moving to Edinburgh to develop a website for the group. He also spent time in the US helping car giant Ford with its online strategy following its £1 billion acquisition of the Edinburgh-based business.

Blackcircles generated revenues of about £27.8m in 2013, an increase of 20 per cent on the previous year, and has enjoyed annual expansion at a similar pace since 2008.

Thanks to the popularity of its “click and fit” formula, which includes the sale of tyres and their fitting, growth in the first three months of this year accelerated to 34 per cent.

Michelin, which described yesterday’s deal as an alliance between “two European players who have succeeded in creating a new efficient tyre sales business model”, said that pace is likely to continue in the coming years, mainly due to the boom in the UK’s online retail sector and Blackcircles’ strong position within the market.

The company last year opened its first tyre fitting centre in Scotland under a tie-up with Tesco, where Leahy was at the helm for 14 years until 2011.

The Tesco PitStop, at the retailer’s Silverburn site in Glasgow, is the fourth in the UK and joined other sites in Cambridge, Milton Keynes and Handforth in Cheshire.

At the time of the Silverburn opening, Welch said: “It’s always been my ambition to achieve something similar to Sir Tom Farmer at Kwik-Fit and, all in all, we’re not far off where we want to be at this point in time.”

The company, which also works with a network of more than 1,300 independently-owned garages across the UK, last year signed a sponsorship deal with ITV around the broadcaster’s coverage of Formula E, a new championship for racing cars powered purely by electricity. The final races in the current season are due to be held in London next month.

Michelin’s acquisition of the Borders-based business comes hot on the heels of its purchase of a 40 per cent stake in French online tyre retailer Allopneus. That deal, sealed last month, was heralded as the group’s expansion of its “active e-commerce strategy”.

Michelin chief executive Jean-Dominique Senard 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.”