Coverage: Icahn purchases Precision Auto Care
Billionaire Carl Icahn has reached a deal to purchase Leesburg, Virginia-based Precision Auto Care Inc., a 42-year-old chain of vehicle repair shops.
Drew Hansen of the Washington Business Journal had the news:
Icahn Automotive Group LLC, a subsidiary of Icahn Enterprises LP, will take on more than 250 Precision Tune Auto Care locations, adding to its stable of more than 1,000 corporate-owned auto-related retail and service centers under names such as Pep Boys and Auto Plus, according to a Friday announcement.
Full terms of the deal were not disclosed. Icahn Enterprises said it will offer Precision Auto shareholders merger compensation of $37 million, adjusted at closing to reflect net working capital and reduced by certain closing costs and claims against a $4.5 million escrow account. The deal will close following a special shareholder meeting to ratify the merger.
Precision Auto Care will keep its name following the deal and CEO Robert Falconi will continue to lead the company.
Precision Auto posted $7.6 million in revenue for the quarter ending March 31. The company has service locations in 26 states, with large concentrations in Georgia, North Carolina and South Carolina. The company is headquartered at 748 Miller Drive in Leesburg.
Jeff Clabaugh of WTOP reported that Precision’s CEO will continue to run the company:
The deal also includes Precision Auto Wash and Precision Lube express centers.
“Coupled with our existing footprint of more than 1,000 corporate-owned locations, as well as our in-house automotive parts and tire distribution capabilities, we are uniquely positioned to provide high-quality parts, tires and services to our customers at the most competitive price,” said Daniel Ninivaggi, CEO of Icahn Automotive Group LLC.
Precision Auto Care has been in business for more than 40 years and has service locations in 26 states.
Precision CEO Robert Falconi will continue to head the Precision division, and the locations will continue to operate under the Precision brand name.
Precision thinly traded stock was up 73 cents to $1.54 per share in Friday midday trading.
Austen Hufford of The Wall Street Journal reports the deal is a bet that American’s won’t fix their own cars:
Mr Icahn has spent the past few years making deals aimed at extending his automotive-service network nationwide, as increasingly complex cars have their owners relying more on professionals for repairs. On Friday, Icahn Automotive Group agreed to buy car-service chain Precision Auto Care for about $US35 million ($47m). The deal would add 250 locations to the billionaire investor’s 1000 existing shops.
“We’re positioning ourselves well to take advantage of an increase in fleets,” Mr Icahn said, as he expects ride-hailing and sharing services to displace some personal-car ownership and sees rental-car fleets expanding to accommodate those without their own cars.
Mr Icahn’s goal is to build a company with nationwide reach that can make, sell and install parts, having recently bought parts-and-repair chains Pep Boys and Just Brakes as well as auto-parts distributor Auto Plus. He also took parts maker Federal-Mogul private earlier this year after owning a significant stake for a decade.
He also owns stakes in ride-hailing service Lyft and car-rental company Hertz, which has a partnership through which Lyft drivers can rent vehicles if they don’t have their own.