Philadelphia -- The Pep Boys — Manny, Moe & Jack, has agreed to be taken private by private equity firm The Gores Group for about $791 million. The total transaction, including debt, is valued at about $1 billion.
Under the terms of the buyout, the Los Angeles-based Gores Group will pay Pep Boys shareholders $15 a share, 24% above the closing price on Friday.
“Partnering with the Gores Group delivers a significant premium for Pep Boys’ shareholders and ensures a strong foundation for us to continue our expansion,” Michael R. Odell, the chain CEO and president, said in a statement. “Our board firmly believes that this transaction is in the best interests of all of our stakeholders.”
Odell and other senior managers, are expected to remain in their positions once the acquisitions closes.
Pep Boys' board unanimously approved the acquisition, which still needs approval from the company's shareholders. The transaction is expected to close in the fiscal second quarter. The agreement includes a provision, which allows Pep Boys to seek and receive alternative offers for a period of 45 days.
Pep Boys was founded in 1921 by Emanuel (Manny) Rosenfeld, Maurice (Moe) Strauss, Moe Radavitz and Graham (Jack) Jackson. It has more than 700 locations in 35 states and Puerto Rico.