PHILADELPHIA—The boards of directors of Pep Boys – Manny, Moe & Jack and Icahn Enterprises L.P. have approved Icahn's $1.03 billion offer to buy full control of the Philadelphia-based tire and auto parts retailer and auto service provider.
The deal includes a termination fee of $39.5 million to Bridgestone Americas Inc., according to the terms of Pep Boys' previous merger agreement with Bridgestone Retail Operations L.L.C., Icahn and Pep Boys said.
The parties expect the deal, which is not conditional on financing, to close in the first quarter of 2016.
“This was a terrific opportunity to leverage the financial resources and industry knowledge of Icahn Enterprises to the benefit of Pep Boys' customers, manufacturer partners and employees and further bolster our U.S. automotive footprint,” said Carl C. Icahn, chairman of Icahn Enterprises.
“Since our acquisition of Auto Plus, our wholly owned automotive aftermarket company, in June, we have been actively looking for an excellent synergistic acquisition opportunity like Pep Boys, which has enormous growth potential, strong brand recognition and well-known, best-in-class customer service.”
Pep Boys, based in Philadelphia, operates more than 800 locations in 35 states and Puerto Rico, offering tires, maintenance and repair and parts and accessories.
Pep Boys CEO Scott Sider said the company is “very pleased to have reached this agreement, which delivers outstanding value to Pep Boys' shareholders, provides new opportunities for Pep Boys employees and allows Pep Boys to benefit from the significant expertise and resources of Icahn Enterprises.
“There are tremendous opportunities for Pep Boys and Auto Plus, a company that shares Pep Boys' unwavering commitment to best-in-class customer service and solutions. I am confident in Pep Boys' strong future growth prospects as an Icahn Enterprises portfolio company.”