Mavis Tire Express Services has entered into a definitive agreement to acquire Pep Boys from Icahn Enterprises for approximately $700 million in cash. The purchase price remains subject to customary adjustments.
A Mavis subsidiary will acquire The Pep Boys-Manny, Moe & Jack Holding Corp. from Icahn Automotive Group, a subsidiary of Icahn Enterprises. The transaction is expected to close in the coming months, subject to customary closing conditions.
Icahn Enterprises will retain the real estate previously transferred from Pep Boys to its broader portfolio. It will also continue to own the AAMCO Transmissions and Precision Tune Auto Care businesses, which are not included in the transaction.
Pep Boys operates nearly 800 automotive service locations across the United States and Puerto Rico. Its services include tires, repairs, oil changes, routine maintenance and support for commercial vehicle fleets.
The acquisition will expand Mavis’ presence in existing and new markets, particularly across the western United States, where Pep Boys has a significant footprint. The combined network will include more than 4,400 owned and franchised service center locations across the United States and Canada.
Mavis expects Pep Boys’ distribution capabilities to strengthen its national supply chain. The acquisition will also add an established customer base and a brand that has operated in the automotive aftermarket for more than a century.
Mavis currently operates more than 3,600 locations through a portfolio of automotive service brands. These include Mavis Discount Tire, Mavis Tires & Brakes, Midas, Express Oil Change & Tire Engineers, Brakes Plus, Tire Kingdom, NTB, Town Fair Tire and Tuffy.
The transaction is expected to create opportunities for greater purchasing power, distribution efficiency and other economies of scale. Pep Boys will also gain access to Mavis’ operating capabilities, technology and larger service network.
Pep Boys was founded in 1921 by Navy veterans Manny Rosenfeld, Moe Strauss and Jack Jackson. The company serves millions of individual drivers and commercial customers through technicians at locations across the country.
Icahn Enterprises acquired Pep Boys in 2016. The diversified holding company said it has worked with the Pep Boys management team over the past decade to grow the business and strengthen its competitive position.
Jefferies is serving as Mavis’ exclusive financial adviser. Covington & Burling and Bullard Law Group are providing legal counsel, while C Street Advisory Group is serving as strategic communications adviser.
Brown Rudnick is serving as legal counsel to Icahn Enterprises.
KEY QUOTES:
“Today’s announcement marks a significant milestone as Mavis continues to execute its growth strategy. Pep Boys is one of the most well-respected names in the automotive aftermarket, and we look forward to welcoming it into the Mavis family of brands.”
“Pep Boys brings a loyal customer base, deep-rooted market presence across the United States, and a distribution network that will meaningfully enhance our supply chain nationwide. Together, we will create a stronger, more geographically diverse platform with the scale and capabilities to provide dependable service to even more customers and create meaningful opportunities for employees.”
“We have tremendous respect for what the Pep Boys team has built, and we look forward to partnering with them to drive their continued success.”
David Sorbaro, Co-CEO of Mavis Tire Express Services
“For more than 100 years, Pep Boys has earned the trust of drivers across the country by delivering quality service with honesty and care.”
“Mavis shares these values and, as part of the Mavis family, Pep Boys will have the scale, footprint, and operational and technological strength to continue building on its legacy as it enters a new chapter of growth.”
Joe Auriemma, CEO of Pep Boys
“We believe that the combined businesses will benefit greatly from the inevitable economies of scale and from the great experience of the Mavis team in this industry. We welcome the Mavis acquisition and are thankful to all of the employees of Pep Boys who made this transaction possible.”
Carl C. Icahn, Chairman of Icahn Enterprises
“Icahn Enterprises acquired Pep Boys in 2016 because of its exceptional fundamentals, a storied brand, a loyal customer base, and a footprint that needed the right stewardship to realize its full potential.”
“Over the past decade, we have worked closely with the Pep Boys team to grow the company and strengthen its competitive position while maintaining best-in-class customer service. I look forward to watching Pep Boys continue to grow and succeed as part of Mavis.”
Ted Papapostolou, CEO of Icahn Enterprises
