Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Tech

Tech takes the field at World Cup soccer

Jun 27, 2019

Latest Episodes

Download
HTML Embed
HTML EMBED
Click to Copy
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Download
HTML Embed
HTML EMBED
Click to Copy
Download
HTML Embed
HTML EMBED
Click to Copy
Make Me Smart with Kai and Molly
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report

Why Carl Icahn wants to pay $1 billion for Pep Boys

Amy Scott Dec 29, 2015
Share Now on:
HTML EMBED:
COPY

Manny, Moe and Jack never had it so good. Those are the faces of the auto parts and service company Pep Boys, which has been the target of a bidding war between investor Carl Icahn and Japanese tire maker Bridgestone. On Monday, Icahn upped the ante, offering roughly $1 billion for the business.

The auto parts and service industry has benefited from an increasingly aging U.S. vehicle fleet. The average car and light truck on the road right is a record 11.5 years old, according to IHS auto analyst Mike Wall.

Cars are better made, and people have held onto them longer in a shaky economy, he said. By 2020, Wall predicts 76 million vehicles will be at least 16 years old.

“Those vehicles out there are going to need repairs,” he said. “You’re going to see a lot of the do-it-yourselfers still out there repairing their vehicles and, of course, the service shops remaining busy.”

Pep Boys benefits from both. It sells parts and service in more than 800 stores around the country. Meanwhile, the improving job market and low gas prices have also been a boon to the business. People are commuting more and putting more wear and tear on their cars. They’ve also got extra money to spend.

“People are putting a little more money into maintenance that had been deferred,” said analyst Brian Sponheimer with Gabelli & Company.

But Pep Boys’ two suitors want different things from the company. Bridgestone has its eye on the service side of the business, hoping to expand the 2,200 tire and repair centers it already operates, mostly under the Firestone brand, Jefferies analyst Bret Jordan said.

“As cars have become more complicated, the growth in ‘do-it-for-me’ service is certainly there and driving fairly attractive valuations,” said Jordan.  

Meanwhile, it’s the retail side Carl Icahn is after, Jordan said, to combine with the Auto Plus parts chain he bought earlier this year.

If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air.  But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.

Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.

When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.

Marketplace helps
you stay financially responsible all year, now we need YOUR help to balance our budget. 

Help us reach 2,500 donors by June 30!

We’re counting on you today!

Marketplace helps you stay financially responsible all year, now we need YOUR help to keep our budget on track.
Donate NOW to help us hit our target of 2,500 Marketplace Investors by June 30!