Pep Boys puts itself up for sale

Several months after its CEO resigned in September, Pep Boys says it is reviewing strategic alternatives, including a possible sale, merger or other deal.

The company says the board of directors will be assisted in its review by Rothschild Inc. as its financial advisor and Morgan, Lewis & Bockius LLP as its legal advisor, each of whom has been advising the board in connection with the various inquiries that have been previously received from third parties expressing an interest in a potential transaction.

The board has determined that, in light of these inquiries, it is appropriate to conduct a strategic review that evaluates Pep Boys’ current long-term business plan against a broad range of alternatives that have the potential to enhance shareholder value.

“The Board is encouraged by the value-enhancing initiatives that our management team has been pursuing and the progress that we have made in growing comparable store sales, driving gross margin returns, reducing expenses, shrinking inventory and unlocking the value of our real estate by rationalizing our store base. We will continue to focus on these value-enhancing opportunities under the leadership of Scott Sider, our new CEO,” said Chairman of the Board Bob Hotz. “However, in keeping with our commitment to act in the best interests of all shareholders, and given that a number of potential strategic and financial buyers have expressed an interest in discussing a transaction with Pep Boys, we have determined that it is prudent to explore strategic alternatives to determine the best opportunities for enhancing shareholder value at this time.”

There is no set timetable for the strategic review process.

Further, Pep Boys has not made a decision to pursue a transaction. There can be no assurance that the process described above will result in the consummation of any transaction or, if a transaction is undertaken, as to its terms, structure or timing. Pep Boys does not intend to disclose or comment on further developments regarding its review of possible strategic alternatives unless and until the Board approves a specific action or it otherwise concludes its review of strategic alternatives.

Pep Boys has over 800 locations in 35 states and Puerto Rico.