PHILADELPHIA — Bridgestone Americas Inc. announced that Pep Boys and Bridgestone Retail Operations LLC (BSRO), a wholly owned subsidiary of Bridgestone, have entered into a definitive merger agreement, according to a press release.
Under the agreement, BSRO will acquire Pep Boys in an all cash transaction for $15 per share, or around $835 million in aggregate equity value, stated the release.
This transaction represents “a premium of 23 percent over Pep Boys’ closing price of $12.15” on Oct. 23, reported the release, as well as a premium of 62 percent “over Pep Boys’ unaffected (prior to market speculation of a potential transaction) price of $9.25 on May 19.”
The release added that the transaction is structured as a tender offer.
“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, in the release. “Our shared expertise and commitment to our customers and employees will help us build an even stronger organization.”
Established in 1921 and headquartered in Philadelphia, continued the release, Pep Boys has more than 7,500 service bays in over 800 locations throughout 35 states and Puerto Rico, and offers auto parts and services.
This acquisition helps to accelerate Bridgestone Corporation’s global growth strategy, informed the release, and will add an additional, approximate 800 locations to BSRO’s network of 2,200 tire and auto service centers, which currently operate under the Firestone Complete Auto Care, Hibdon Tires Plus, Tires Plus and Wheel Works brands.
Furthermore, reported the release, this acquisition represents an “immediate nationwide expansion of more than 35 percent for BSRO.”
“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,” stated Scott Sider, CEO of Pep Boys, in the release. “This 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.”
The acquisition is expected to close early in 2016, noted the release.
You can find the release here.