Jones Day Leads Bridgestone In $835M Pep Boys Buy

Bridgestone Corp. agreed to buy the Pep Boys retail chain for about $835 million, pushing deeper into an auto-parts industry that has benefited from Americans keeping their cars on the road longer.

Bridgestone Americas CEO Gary Garfield said in a statement that he looked forward to building a “stronger organization” by combining, not just the stores, but also the two companies’ distributor networks, with Pep Boys contributing “more than 35 percent” of the combined companies’ sales.

Shares of Pep Boys-Manny Moe and Jack (NYSE:PBY) traded up 23.29% on Monday, reaching $14.98. Potential buyers approached the company again this spring, after a fiscal year that showed losses of .3 million.

Bridgestone now operates a huge network of company-owned automotive service providers, made up of almost 2,200 tire and vehicle service centers across the US, and includes Firestone Complete Auto Care, Tires Plus, and Wheelworks store locations.

Under terms of this deal, Bridgestone pays $15 per share through its tender offer.

The deal comes months after Pep Boys’ president and CEO resigned as the speculation built over whether the company was considering a sale.

The transaction is expected to close in the beginning of 2016.

Based in Tokyo, Bridgestone is the world’s largest tire company, but it still has a lot to gain from the deal.

About Pep Boys Since 1921, Pep Boys has been the nation’s leading automotive aftermarket chain.

Pep Boys-Manny Moe and Jack (NYSE:PBY) last announced its quarterly earnings results on Tuesday, September 8th.

The deal follows a Wall Street Journal report in May that private equity firms, including San Francisco-based Golden Gate Capital, had expressed an interest in acquiring Pep Boys.

Gabelli & Co.is separate from Gamco Asset Management Inc., the Mario Gabelli unit with a stake in Pep Boys. The completion of the tender offer will be conditioned 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.

JPMorgan Securities LLC provided financial advice to Bridgestone, while Jones Day served as its legal adviser.