Icahn sells Pep Boys to Mavis for $700 million in auto-service deal

Icahn Enterprises agreed to sell Pep Boys to Mavis Tire Supply for $700 million, exiting a decade-long investment in the auto-service chain.

Carl Icahn's holding company agreed to sell Pep Boys to Mavis Tire Supply for $700 million, exiting a decade-long bet on the auto-service chain while retaining some of its owned real estate.

Icahn Enterprises acquired Pep Boys in 2016, according to the Wall Street Journal, which first reported the deal. The company is expected to retain some of the chain's owned real estate as part of the transaction structure, the report said.

The $700 million enterprise value reflects Pep Boys' network of roughly 1,000 locations across the U.S., which include auto-service centers and retail parts stores. Mavis Tire Supply, a privately held tire and auto-service chain based in New York, will absorb those locations into its existing network of more than 2,000 service centers.

For Icahn Enterprises, the sale frees up capital that the holding company can redeploy into other investments as it reshapes its portfolio. For Mavis, the acquisition accelerates its consolidation strategy in the fragmented auto aftermarket industry, where scale has become increasingly important for competing with national chains such as Monro Inc. and Bridgestone's Firestone network.

The transaction marks one of the largest divestitures by Icahn Enterprises in recent years. The holding company, which owns stakes in energy, automotive, food packaging, and real estate, has been streamlining its portfolio after pressure from short sellers and regulatory scrutiny. In 2023, Icahn Enterprises faced allegations of overvaluing its assets, leading to a sharp decline in its stock price and a subsequent settlement with the Securities and Exchange Commission.

Mavis has been on an acquisition spree, buying regional tire and auto-service chains across the U.S. including Tire Kingdom, NTB, and multiple independent operators. The Pep Boys acquisition gives the company a stronger presence in markets where it previously had limited coverage, particularly in the Midwest and Southeast. The deal is expected to close in the coming months, subject to regulatory approvals.

The auto aftermarket industry has seen steady consolidation as independent operators seek scale to negotiate better pricing from suppliers and invest in technology for fleet management and digital booking. Pep Boys, founded in 1921, was one of the first national auto-parts and service chains but has faced increased competition from big-box retailers such as AutoZone Inc. and O'Reilly Automotive Inc., as well as specialized service providers.

For Icahn, the 88-year-old activist investor, the Pep Boys sale represents a retreat from a sector where his firm struggled to generate the returns it achieved in other industries. Icahn Enterprises' units that focus on energy and automotive parts have been among the weaker performers in its portfolio, according to its annual report.

The deal also highlights diverging strategies in the auto aftermarket: while Mavis pursues aggressive expansion through acquisitions, competitors such as Monro Inc. have focused on organic growth and same-store sales improvements. The consolidation wave is expected to continue as the average age of vehicles on U.S. roads reaches a record 12.6 years, driving demand for maintenance and repair services.

This article is for informational purposes only and does not constitute investment advice.