Icahn buys AAMCO, Cottman franchisor ADS

SOUTHFIELD, Mich. — Icahn Enterprises L.P. has acquired American Driveline Systems (ADS) — franchisor of the AAMCO Total Car Care and Cottman Transmission & Total Auto Care businesses — from Transom Capital Group.

Icahn Enterprises Chairman Carl Icahn called the deal the " next step in building out our national automotive service network."

Financial details were not disclosed. Transom Capital has owned ADS for just nine months, buying it in January from American Capital Ltd., which had owned it for 11 years prior to that.

"I believe that the automotive aftermarket service industry is undergoing secular change driven by increased vehicle complexity, advances in technology, as well as the growth of automotive fleets, including ride-sharing and car-sharing networks," Mr. Icahn said.

"These changes will continue to offer, in my opinion, extremely attractive and unique investment opportunities. With our presence throughout the automotive aftermarket value chain, Icahn Enterprises is positioned to capitalize on these trends."

ADS is the franchisor of approximately 680 AAMCO and Cottman locations in the U.S. and Canada. The addition of ADS will expand Icahn Automotive Group L.L.C.'s reach to 1,900 company-owned and franchised service locations in 49 states plus Puerto Rico, the District of Columbia and several other international locations.

"Icahn Automotive Group continues to pursue an aggressive strategy of strengthening our full-service automotive repair capabilities, with the ability to leverage a broad national footprint and what we believe will be the most efficient operating model in the industry," Icahn Automotive CEO Daniel Ninivaggi said in a prepared statement.

"We are excited to work with the ADS management team as well as the AAMCO and Cottman franchisees to capitalize on the many growth opportunities we see ahead."

This deal is Icahn's second acquisition this year of an automotive service-related franchise group.

In July it completed a $37 million takeover of Precision Auto Care Inc., franchisor of the Precision Tune Auto Care automotive service business.

That deal covered Precision Auto Care's franchising business, which comprises roughly 250 Precision Tune stores in the U.S. — including 43 locations owned by Precision Auto — and 65 more locations outside the U.S., including five in Mexico.

Icahn also has made several acquisitions of tire and auto service dealerships of late, including:

• Advanced Auto Service & Tire Centers of Phoenix (15 retail stores);

• Mathis Tire & Auto Service and Direct Tire Distributors in Memphis (12 retail stores and a 6,000-unit warehouse);

• Just Brakes L.L.C. (134 stores throughout the U.S. southern tier); and

  PJ's Auto & Tire Center in Franklin Square, N.Y.; and Phil Cavill's Tire & Auto Service Center in Clawson, Mich.

Most of these locations have been or are being converted to Icahn Automotive's Pep Boys Service & Tire Center format.