Bridgestone Offers $835M to Buy Pep Boys Chain
Japanese tire giant Bridgestone agreed Monday to buy Pep Boys for $835 million and potentially create the largest chain of U.S. automotive service centers, the companies announced.
The deal would create a chain of more than 3,000 auto care stores — 2,200 Bridgestone-owned centers including Tires Plus, Firestone Complete Auto Care, Hibdon Tires Plus and Wheel Works, and more than 800 company-owned Pep Boys stores.
According to the companies the deal will finalize in early 2016.
Bloomberg (via Automotive News) reported that the deal would create one of the largest players in a growing market of automotive service centers.
In July, IHS Automotive reported that the average age for a car in the U.S. was 11.5 years. In its report, IHS said the repair businesses should consider older vehicles as a growing market opportunity.
“I believe we need to begin thinking about that ‘sweet spot’ differently. Now that the average age is 11.5 years, the key repair opportunities must include vehicles older than 11 years, which hasn’t been considered by many in the marketplace up to now,” Mark Seng, global aftermarket practice leader at IHS Automotive, said in a July statement.
It’s also a good time to invest in the auto parts business, apparently. According to Bloomberg, AutoZone, Advance Auto Parts and O’Reilly Automotive stock has gained around 20 percent this year. Pep Boys stock surged 23 percent Monday on the acquisition news.
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But the question on everyone's mind: How will this impact the status of the Elio Motors service centers? On maybe that was slightly sarcastic, but it is a valid question.
The board room meeting went something like this: "Mata oai dekite ureshii desu. Most of us, honor the board members have the opportunity to buy a boy of PEZ." "PEZ Boys? Are you sure?" "Yup!" "Ooooo. We must have. How much?" "100638375000 yen." "What think you Masaaki?" "Look in my upper left hand desk drawer. Yen. Plenty." They're going to be very disappointed when they discover they didn't corner the market on PEZ dispensers.
Clearly, Bridgestone sees the immense value in the Elio service agreement and couldn't help themselves.
The Firestone here is horrible. I was out of town and my wife took our Suburban in for loose steering. They quoted ball-joints for $1500. I got home, jacked it up and found the pitman arm going out. Ball joints were rock solid. Several of my coworkers have had similar issues. I quit going to Hibdons several years ago because their work quality kept going down while their prices kept going up. I've avoided Pep-Boys since having to rework one of their horrible repairs. I guess this merger means most of the crappy work by entry-level technicians will be done under the management of one giant chain. I hope they put together an effective tech training/mentoring program.