SerpApi.Org
Carl Icahn’s company, Icahn Enterprises, has struck a deal to sell auto-service chain Pep Boys to private-equity owned Mavis Tire Express Services.
Mavis will pay roughly $700 million in cash under the deal, the companies said Tuesday.
The details
A subsidiary of Mavis will take over the business from a subsidiary of Icahn Enterprises. Icahn Enterprises, known by its ticker IEP, will hold on to some owned real estate, along with the AAMCO Transmissions and Precision Tune Auto Care businesses.
Mavis, based in White Plains, N.Y., offers tire services and general automotive repair across its more than 3,600 owned and franchised shops around the U.S. and Canada. Its other auto-service center brands include Midas, Tire Kingdom and Tuffy. It is jointly run by brothers David and Stephen Sorbaro.
A group of private-equity firms including BayPine and TSG Consumer Partners won an auction in 2021 to acquire Mavis in a deal that valued the auto-service chain at around $6 billion, including debt.
Pep Boys was founded in Philadelphia in 1921 by Navy veterans Manny, Moe and Jack. Today it counts over 750 locations across the U.S. and Puerto Rico, offering auto repair and tire services that include oil changes and brake maintenance.
The context
Icahn bought Pep Boys in 2016 for around $1 billion after prevailing in a fierce bidding war against Japanese tiremaker Bridgestone. He had been on the hunt for assets to compliment his existing portfolio of auto-related businesses.
The bet proved more complex than anticipated. In 2018, IEP announced it was selling off Federal-Mogul after owning the car-parts maker for roughly a decade. One of IEP’s other auto businesses, Auto Plus, filed for bankruptcy in 2023. Last year, IEP transferred most of the real estate associated with its auto segment to a real-estate division of IEP.
IEP is selling Pep Boys for more than the valuation it carried it at, but not much more, people familiar with the matter said.
“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,” Icahn said. “We welcome the Mavis acquisition and are thankful to all of the employees of Pep Boys who made this transaction possible.”
David Sorbaro, co-CEO of Mavis, said he has long admired Pep Boys and had looked at a deal for it when it changed hands a decade ago.
An acquisition of Pep Boys should help Mavis grow its presence into new and existing markets—particularly across the Western part of the U.S. where Pep Boys already has a sizable retail footprint.
Write to Lauren Thomas at [email protected]