Skip to main content
EVENT TRACKER
Keep track of rescheduled, canceled industry events with our COVID-affected event tracker - Powered by Snap Finance
Close
Sister Publication Links
  • Rubber & Plastics News
  • European Rubber Journal
tb-logo
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • OPINION
    • CORONAVIRUS
    • AUTO INDUSTRY
    • BUSINESS/FINANCIAL
    • COMMERCIAL TIRE
    • FACTORY FIXES
    • GOVERNMENT & LAW
    • INTERNATIONAL
    • MOTOR SPORTS
    • NEW PRODUCTS
    • RETAIL TIRES
    • SERVICE ZONE
    • SEMA/AAPEX
    • SMALL BUSINESS
    • TIRE MAKERS
    • SPONSORED CONTENT
    • New round of Paycheck Protection Program funding opens
      Vaccine may usher sense of normalcy
      Cover-up: More retailers requiring face masks to curb COVID
      USW alleges COVID-19 violations at Kumho plant
    • GM banking on 'BrightDrop' EV to build commercial van business
      Stengel promoted to president of NAPA parent Genuine Parts Co.
      Former auto exec Tyrone Jordan joins Cooper board of directors
      Bridgestone crafts virtual city to showcase sustainable-mobility initiatives
    • U.K. race series extends contract with Goodyear through 2026
      New round of Paycheck Protection Program funding opens
      H&H broadens precure OTR business with Continuum mold acquisition
      Apollo to raise prices of Vredestein brand, effective March 1
    • Evolving delivery trends good for CV tire sector — Cooper exec
      Conti adding light-duty products to General Tire OTR tire lineup
      GM banking on 'BrightDrop' EV to build commercial van business
      Gary Price to head Love's Truck Care operations
    • New stimulus package fixes PPP loan confusion
      USW opposes Taiwan tire makers' dumping counterproposal
      New round of Paycheck Protection Program funding opens
      Taiwan tire makers propose settlement of import duties case
    • Evolving delivery trends good for CV tire sector — Cooper exec
      U.K. race series extends contract with Goodyear through 2026
      Sentury Tire hires Martin Winter as global OE technical director
      USW opposes Taiwan tire makers' dumping counterproposal
    • U.K. race series extends contract with Goodyear through 2026
      Goodyear Racing staying on track
      General Tire Canada renews sponsorship deal with Raceline Network
      Indy Autonomous Challenge: High-speed, head-to-head, no drivers
    • Hankook doubles size range of Ventus V2 all-season UHP line
      Conti adding light-duty products to General Tire OTR tire lineup
      Goodyear-brand belts back on the market under licensing arangement
      Kumho launches commercial LT, performance tire lines
    • Hankook doubles size range of Ventus V2 all-season UHP line
      New stimulus package fixes PPP loan confusion
      Goodyear-brand belts back on the market under licensing arangement
      WTC hosting webinar Jan. 20 on load-capacity standards
    • AMRA to host 5 educational webinars in Feb., March
      Shocks/struts maker KYB unveils video training series
      Bauer Built completes expansion at Neb. facility
      Marinucci: Basic steps to email efficiency
    • WTC hosting webinar Jan. 20 on load-capacity standards
      Denver's Brian Sump named AAPEX Shop Owner of the Year
      DUB, TIS Wheels founder Myles Kovacs is SEMA Person of the Year
      AAPEX: Using social media to promote your business
    • New stimulus package fixes PPP loan confusion
      Vaccine may usher sense of normalcy
      2020 Review: PPP loans give boost to small businesses
      Latest COVID relief bill includes $325B in small-business support
    • Papadimitriou to leave position with Pirelli after six months on job
      SRNA increasing prices on Dunlop motorcycle tires
      Sentury Tire hires Martin Winter as global OE technical director
      USW opposes Taiwan tire makers' dumping counterproposal
    • Sponsored By Yokohama Tire Company
      7 questions to ask consumers when they need tires for a crossover SUV
      Sponsored By Yokohama Tire Company
      Stocking Tires for Crossover SUVs
  • SHOP FLOOR
    • BALANCING
    • DEMOUNTING
    • SAFETY
    • TIRE REPAIR
    • TPMS
    • TRAINING
    • VEHICLE LIFTING
    • WHEEL TORQUE
    • Video: Balancing Tire
      Choosing the right balancing equipment
      Safety tips for wheel balancing
      An introduction to wheel balancing
    • Video: Demounting
      Demounting Equipment
      Making rims ready for a tight seal
      Tire changer types, tips and trends
    • Video: Safety
      Making friends with OSHA
      Ergonomics on the shop floor
      Customers
    • Video: Tire Repair
      Tire repair: Shining a light on visual inspections
      Staying safe when repairing a tire
      Essential tools, materials and equipment for tire repair
    • Video: TMPS Service
      Decoding sensor data for TPMS diagnosis
      Replacement TPMS sensor overview
      The life-saving work of TPMS
    • Video: Training
      Advantages of apprentice program partnerships
      Options and resources for CE tech training
      Internship ideas to attract tech talent
    • Video:Vehicle Lifting
      All types of lifts for all types of work
      Tips and recommendations for lifting safety
      The gravity of proper lift points
    • Video: Wheel Torque
      Using torque sticks to speed service times
      The danger of too much, too little torque
      The importance of torque specifications
  • Multimedia
    • VIDEOS
    • PHOTOS
    • PODCASTS
  • Events
    • ASK THE EXPERT
    • LIVESTREAMS
    • WEBINARS
    • SEMA LIVESTREAMS
  • Data
    • DATA STORE
  • Resources
    • DIRECTORY
    • CLASSIFIEDS
  • ADVERTISE
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. News
November 09, 2015 01:00 AM

Buying binge: Bridgestone acquires Pep Boys

Bruce Davis
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    NASHVILLE, Tenn.—Bridgestone Americas Inc.'s $835 million offer to buy Philadelphia-based tire retailer/auto service provider Pep Boys-Manny, Moe & Jack will create a retail network of more than 3,000 stores and annual revenue estimated at more than $5 billion.

    Bridgestone is offering $15 a share for Pep Boys, which the Nashville-based tire maker said is a premium of 23 percent over Pep Boys' closing price of $12.15 on Oct. 23 and 62 percent over Pep Boys' unaffected (prior to market speculation of a potential transaction) price of $9.25 on May 19.

    The transaction, made public Oct. 26, is expected to close in early 2016.

    “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.”

    Philadelphia-based Pep Boys operates 801 retail locations with 7,500-plus service bays in 35 states and Puerto Rico, including 234 tire-centric Service & Tire Center stores. The tire centers are clustered predominantly in major metro areas such as Atlanta, Chicago, Houston, Philadelphia, Los Angeles, San Diego, Seattle and Tallahasee and Tampa, Fla.

    Fiscal 2014 sales were $2.08 billion, putting the per-store average at $2.6 million. Tires accounted for 18.1 percent of the firm's sales last year, vs. 58.4 percent for parts and accessories and 23.5 percent for service labor.

    The company reported operating and net losses last year of $18.9 million and $27.3 million, respectively.

    The net loss contrasted with net income of $6.9 million in fiscal 2013. The operating result also was negative, Pep Boys said, dropping $18.9 million into the red vs. an operating profit of $22.3 million last year.

    Pep Boys stores carry a dozen-plus brands of tires, including BFGoodrich, Carlisle, Continental, Cooper, Falken, General, Hankook, Maxxis, Michelin, Mickey Thompson and Pirelli, as well as its own brands, Cornell, Definity and Futura, made by Cooper Tire & Rubber Co.

    Pep Boys' board of directors has been evaluating potential commercial alternatives for the company since June, looking at ways to enhance shareholder value that included a possible sale, merger or other form of business combination or strategic transaction.

    Bridgestone Americas' retail presence in the U.S. stands at more than 2,200 locations, operating under the Firestone Complete Auto Care, Tires Plus, Hibdon Tires Plus and Wheel Works brand banners.

    Bridgestone also claims to be represented by more than 5,000 independent dealers and distributors in the U.S.

    In comments made to Pep Boys employees during an online “town hall meeting,” Mr. Garfield said Bridgestone in particular noted that Pep Boys:

    c Stores “appear to be well-managed, which speaks to the skills of your field and store teams”;

    c Has a strong e-commerce model, “which is something we also are accelerating”;

    c B2B model seems to be very mature; and

    c Has a “very efficient” parts-sourcing strategy.

    In prepared remarks, Pep Boys CEO Scott Sider said the transaction “delivers a significant premium for Pep Boys' shareholders and offers new opportunities for our employees across a bigger business. We look forward to working with the Bridgestone team for a smooth and successful transition.”

    Under the terms of the agreement—which has been approved unanimously by the boards of both Bridgestone and Pep Boys—a wholly owned subsidiary of Bridgestone Retail Operations will carry out a tender offer for all outstanding shares of Pep Boys at $15 per share in cash.

    The completion of the tender offer will be conditional on Pep Boys' shareholders' tendering at least a majority of Pep Boys' outstanding shares, determined on a fully diluted basis, and other customary closing conditions, including expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

    Following completion of the tender offer, both companies will complete a merger in which Pep Boys shares that were not tendered in the tender offer will be cancelled and converted into the right to receive $15 per share in cash. Following completion of the transaction, Pep Boys will be wholly owned by and operate under Bridgestone Retail Operations. Pep Boys' stock will no longer trade on the New York Stock Exchange.

    Bridgestone said it expects Pep Boys' Store Support Center will remain in Philadelphia for the time being, pending completion in 2017 of the Bridgestone headquarters office in Nashville, where the tire maker plans to consolidate its retail and non-tire business units with the tire business.

    “We will need to examine how the SSC work fits with this strategy and what is best for the business and customer experiences,” Bridgestone said.

    In the town hall meeting comments, Mr. Garfield said Pep Boys' do-it-yourself (DIY) business is an activity with which Bridgestone has little experience.

    “We are already working to get a better understanding of all the opportunities this business could offer and will be in a better place to elaborate once the deal closes,” he said.

    J.P. Morgan Securities L.L.C. is acting as the exclusive financial adviser to Bridgestone. Jones Day is acting as legal adviser to Bridgestone. Rothschild is acting as the exclusive financial adviser to Pep Boys and Morgan, Lewis & Bockius L.L.P. is acting as legal adviser to the chain.

    To reach this reporter: [email protected]; 330-865-6145; Twitter: @reifenmensch

    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Newsletter Center

    Staying current is easy with Tire Business delivered straight to your inbox.

    SUBSCRIBE TODAY

    Subscribe to Tire Business

    SUBSCRIBE
    Connect with Us
    • Facebook
    • LinkedIn
    • Twitter
    • RSS

    Our Mission

    Tire Business is an award-winning publication dedicated to providing the latest news, data and insights into the tire and automotive service industries.

    tb-logo
    Reader Services
    • Contact Us
    • About Us
    • Site Map
    • Industry Sites
    • Order Reprints
    • Customer Service: 877-320-1716
    Partner Sites
    • Rubber & Plastics News
    • European Rubber Journal
    • Automotive News
    • Plastics News
    • Plastics News China
    • Urethanes Technology
    RESOURCES
    • Advertise
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Media Guide
    • Editorial Calendar
    • Classified Rates
    • List Rental
    • Digital Edition
    • Careers
    • Ad Choices Ad Choices
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • OPINION
      • CORONAVIRUS
      • AUTO INDUSTRY
      • BUSINESS/FINANCIAL
      • COMMERCIAL TIRE
      • FACTORY FIXES
      • GOVERNMENT & LAW
      • INTERNATIONAL
      • MOTOR SPORTS
      • NEW PRODUCTS
      • RETAIL TIRES
      • SERVICE ZONE
      • SEMA/AAPEX
      • SMALL BUSINESS
      • TIRE MAKERS
      • SPONSORED CONTENT
    • SHOP FLOOR
      • BALANCING
      • DEMOUNTING
      • SAFETY
      • TIRE REPAIR
      • TPMS
      • TRAINING
      • VEHICLE LIFTING
      • WHEEL TORQUE
    • Multimedia
      • VIDEOS
      • PHOTOS
      • PODCASTS
    • Events
      • ASK THE EXPERT
      • LIVESTREAMS
      • WEBINARS
      • SEMA LIVESTREAMS
    • Data
      • DATA STORE
    • Resources
      • DIRECTORY
      • CLASSIFIEDS
    • ADVERTISE
    • DIGITAL EDITION