Pep Boys complete sale lease back transaction

Pep Boys Auto Services have closed on the sale of 22 properties for an aggregate purchase price of $77.5 million. Coincident with such sales transactions, the company entered into agreements to lease the proproperties back to be operated as Pep Boys stores for a lease term of 15 years, with four 5-year options.

"We are pleased to have completed this transaction, the proceeds of which, along with cash on hand, satisfied our synthetic lease purchase obligation," says Ray Arthur, chief financial officer for Pep Boys, the nation's leading automotive aftermarket retail and service chain. "In addition, the transaction improved our liquidity by freeing up additional availability on our revolving credit facility and further demonstrates the underlying value of our remaining owned real estate."

Proceeds from the transaction were used to help finance the $116.3 million purchase of 27 store properties and two distribution centers that had been leased at Pep Boys and scheduled to expire on Aug. 1. Eight of the store properties purchased were sold in the announced sale lease back transaction. The remaining 19 store properties and two distribution centers were added to Pep Boy's balance sheet.

With more than 560 stores, Pep Boys owns 235 locations and operates four of its five distribution centers.

With 6,000 service bays in 35 states and Puerto Rico, Pep Boys performs vehicle repair and maintenance, serves the commercial auto parts delivery market and is one of the leading sellers of replacement tires in the United States.

For more information, visit Pep Boys online.