Icahn Enterprises is selling Pep Boys to Mavis Tire for $700 million

The buyer is a Mavis subsidiary, which will take ownership of Pep Boys from Icahn Automotive Group LLC, itself a subsidiary of Icahn Enterprises (Nasdaq $NDAQ: IEP), the companies said. Icahn Enterprises will keep certain real estate it had previously separated from Pep Boys, along with the AAMCO Transmissions and Precision Tune Auto Care businesses.

Pep Boys has close to 800 locations throughout the U.S. and Puerto Rico, where customers can get tire work, oil changes, and a range of general automotive repairs. The addition brings Mavis's total network to more than 4,400 service center locations across the United States and Canada, up from more than 3,600 owned and franchised locations currently. Mavis said the acquisition bolsters its standing in the Western United States, a region where Pep Boys has historically concentrated much of its store base.

"Today's announcement marks a significant milestone as Mavis continues to execute its growth strategy," David Sorbaro, co-chief executive officer of Mavis, said in a statement. "Pep Boys brings a loyal customer base, deep-rooted market presence across the United States, and a distribution network that will meaningfully enhance our supply chain nationwide."

Carl C. Icahn, chairman of IEP, said in a statement that "the combined businesses will benefit greatly from the inevitable economies of scale and from the great experience of the Mavis team in this industry."

Ted Papapostolou, chief executive officer of IEP, said in a statement that Icahn Enterprises acquired Pep Boys in 2016 because of its brand and customer base. "Over the past decade, we have worked closely with the Pep Boys team to grow the company and strengthen its competitive position," he said.

Icahn Enterprises acquired Pep Boys in 2016 for roughly $1 billion, having outmaneuvered Japanese tiremaker Bridgestone in a competitive auction process, according to the Wall Street Journal. The sale price is above the carrying value IEP had assigned to Pep Boys, but not by much.

Pep Boys was founded in Philadelphia in 1921 by Navy veterans. White Plains, New York-based Mavis also operates brands including Midas, Tire Kingdom, and NTB. The transaction is expected to close in the coming months, subject to customary closing conditions, the companies said.