Tire manufacturer Bridgestone is currently looking to improve their position in the auto services business, so they’re looking forward to buying auto parts and repair company Pep Boys, according to Chicago Sun Times.
The deal, valued at $835 million, involves a share cost of $15 in cash and besides this, it marks a premium of 23.5% over last Friday’s closing price for Pep Boys.
The final details will be set in the first quarter of 2016
Still, the companies are linked to signing the deal somewhere in the beginning of 2016, most likely in January, expanding Bridgestone’s already huge network network. To be more specific, they will add 800 locations to their 2200 tire and automotive service centers.
This announcement is the result of activist investor Mario Gabelli, who insisted that Pep Boys should consider a sale or any other type of transaction, in order to increase stock price. Gabelli is currently the largest investor in the company, holding a 12.7% stake
“We are excited to join the Bridgestone family of companies to become part of the world’s largest company-owned tire and automotive service retail network,” declared Scott Sider, CEO of Pep Boys.
The tire manufacturer will grow even bigger
After the deal will be completed, Bridgestone will start accelerating its global strategy. “Our shared expertise and commitment to our customers and employees will help us build an even stronger organization,” Gary Garfield, CEO and President of the company’s American headquarters, which is based in Nashville, Tennessee, said in a statement.
Also, starting with 2016, Bridgestone Retail Operations, will completely own the auto parts and repair company, while Pep Boys will no longer trade on the New York Stock Exchange under this name. On the other side, the brand will still have a couple of stores operating under the Pep Boys brand, according to Brian Zuckerman, one of their spokesmen.
