Bridgestone Americas’ Bridgestone Retail Operations has entered into an agreement to acquire Pep Boys in an all-cash transaction for roughly $835 million.
The acquisition of Pep Boys accelerates Bridgestone Corp.’s global growth. The purchase will add approximately 800 locations to Bridgestone Retail Operations’ nationwide network. Currently, BSRO operates approximately 2,200 tire and automotive service centers under Firestone Complete Auto Care, Tires Plus, Hibdon Tires Plus and Wheel Works brands.
Additionally, Pep Boys’ distribution network will help reach even more consumers with the products and services they want when they need them, Bridgestone said.
“Bridgestone and Pep Boys are two leading companies that share a proud heritage in the American automotive services industry,” said Gary Garfield, CEO and president of Bridgestone Americas. “Our shared expertise and commitment to our customers and employees will help us build an even stronger organization.”
The transaction is expected to close in the beginning of 2016. Under the terms of the agreement, BSRO will commence a tender offer for all outstanding shares of Pep Boys at $15.00 per share, in cash. Following completion of the tender offer, both companies will complete a merger in which Pep Boys shares that are not tendered will be cancelled and converted into the right to receive $15.00 per share in cash, and Pep Boys will be removed from the New York Stock Exchange.
The sale of Pep Boys isn’t unexpected, the company has been looking for opportunities to sell or merge since July 2015. What may be surprising for some is that Bridgestone has emerged as an interested party.
Bridgestone is making several strategic growth moves recently. Just days ago, the tire manufacturer announced it is acquiring TireConnect Systems, a Canadian software developer that offers a turnkey online tire sales tool.
As of now, it is unclear how this deal may affect Cooper Tire & Rubber Co., which produces Futura branded tires for Pep Boys.
