Mavis Tire to acquire iconic auto-service chain in $700M deal

Mavis Tire Express Services Corp. announced on Tuesday (July 22) that it will acquire the iconic auto-service chain Pep Boys from Icahn Enterprises for approximately $700 million in cash. The deal, which is expected to close in the coming months, will significantly expand Mavis’s footprint by adding nearly 800 Pep Boys locations across the United States and Puerto Rico, especially boosting its presence in the western part of the country.

Icahn Enterprises will retain the real estate previously transferred from Pep Boys, as well as its AAMCO Transmissions and Precision Tune Auto Care businesses. The transaction does not include these assets, focusing instead on Pep Boys’ retail and service operations.

Mavis, one of North America’s largest independent tire and vehicle service providers, will grow its network to more than 4,400 service centers across the United States and Canada after the acquisition. David Sorbaro, Co-Chief Executive Officer of Mavis, said in a statement, "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."

Pep Boys, founded in 1921 and known for its tires, repairs, oil changes, and maintenance services, has been part of Icahn Enterprises since 2016. Joe Auriemma, Chief Executive Officer of Pep Boys, said, "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." Carl Icahn, Chairman of Icahn Enterprises, added, "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."

The acquisition is subject to customary closing conditions and regulatory approvals. Advisors on the deal include Covington & Burling LLP and Bullard Law Group for Mavis, and Brown Rudnick LLP for Icahn Enterprises, with Jefferies serving as exclusive financial advisor to Mavis as detailed in the official release.