Icahn Automotive to split into Parts and Service companies

PHILADELPHIA — Icahn Automotive Group L.L.C. is splitting into two independent aftermarket "Parts" and "Service" companies to focus better on unique strategies, customers and business opportunities better, according to parent company Icahn Enterprises L.P.

The Service company will include the automotive repair and maintenance businesses of Icahn's captive Pep Boys chain and its AAMCO and Precision Tune Auto Care franchise businesses, as well as several regional service centers the company has acquired.

The company did not address financial issues or the respective sizes of the newly regrouped business units. The Icahn automotive businesses generated $2.86 billion in sales last year.

"As the number of vehicles in operation continues to grow, and drivers continue to keep their cars longer, we have a tremendous opportunity to expand how we serve our DIFM (do-it-for-me) customers," Brian Kaner, newly appointed Service unit CEO, said.

"Our fast-growing fleet business stands to continue its growth from the expansion of ride-hailing, last-mile delivery and other fleets," he said.

"As an independent company focused on service, we'll have more resources to invest in our core strategic priorities, including continuing to grow our national footprint, investing in new vehicle technology, technician training and career development, and the creation of a best-in-class service model."

The Parts company will include the retail and commercial lines of business of both the Auto Plus and Pep Boys businesses.

"By focusing specifically on the parts sector, where our brands put us among the top 10 commercial auto parts distributors in the U.S., we will continue to capitalize on industry growth, expand and integrate our customer programs, and invest aggressively in core markets where a solid base of business, excellent customer service capabilities, and one of the most experienced teams in the industry have us in a strong competitive position," newly appointed Parts CEO Chris Cox said.

Mr. Cox, a veteran aftermarket industry executive with more than 40 years of experience, most recently was senior vice president of store integration and support for Icahn.

Messrs. Kaner and Cox will report to Icahn Automotive's board of directors and be supported by their own leadership teams, as well as a shared service division led by CFO Michael Nevin.

"As part of the separation plan, the Parts and Service businesses will each make adjustments to their store networks and continue to streamline and decentralize the organizational structure, empowering local leadership to better serve their unique markets," the company said.

Icahn said it expects a short transition period at the end of which the Parts and Service businesses will operate as separate companies.

In fiscal 2018, Icahn Enterprises' automotive segment reported a net loss of $230 million 4.7-percent higher sales of $2.86 billion.

The automotive segment also reported an operating loss of $48 million, Icahn reported in its 10-Q Filing with the Securities and Exchange Commission. The net loss quadrupled to $230 million from $51 million in fiscal 2017.