Pep Boys Finds a Buyer in Bridgestone

Pep Boys—Manny, Moe & Jack agreed to be acquired by tire company Bridgestone Corp. for roughly $835 million in cash, about four months after the automotive parts and services retailer put itself on the block.

Tokyo-based Bridgestone will pay $15 a share for Philadelphia's Pep Boys, a 23% premium over Friday's close. The bid represents a 62% premium to where shares in Pep Boys traded before The Wall Street Journal reported that buyers had expressed interest in acquiring the company.

In May, The Journal reported that private-equity firm Golden Gate Capital and other suitors had recently expressed interest in buying Pep Boys. A month later, the company confirmed it was up for sale.

For its part, Bridgestone said the tie up accelerates its growth plan by adding about 800 Pep Boys locations to Bridgestone's network of about 2,200 tire and automotive-service centers. The acquisition represents an immediate nationwide expansion of more than 35%, Bridgestone said.

The companies said the transaction is expected to be completed in the beginning of 2016 and will be done via a tender offer.

The deal comes after a proposed $804 million acquisition of Pep Boys fell apart in 2012. Gores Group walked away amid dwindling profits and after about two years of talks between Pep Boys and potential buyers. Since then, the company had been focused on turning itself around.

In its latest quarter, Pep Boys reported a profit of $4.8 million, up from a year earlier but sharply below analysts' expectations.

Shares, up 24% this year, jumped 23% premarket to $14.89.

Write to Lisa Beilfuss at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

October 26, 2015 09:45 ET (13:45 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.