Carl Icahn Has Pushed $2B into Auto Parts Business

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Oct. 4, 2017—After this week buying the 680-location Aamco auto service center chain, the New York Post reports that Carl Icahn has spent more than $2 billion in equity cobbling together a vertically integrated powerhouse with an eye on possibly taking it public.

In August, Icahn, CEO of Icahn Automotive Group, finished an acquisition of 250 Precision Tune Auto Care shops. It's all part of Icahn's vertical integration model, said Jim Lang, as Icahn is looking to control the auto supplier (Federal-Mogul), auto parts store (Auto Plus) and the shops that buy the parts (Precision, Pep Boys, Just Brakes).

“The risk is small relative to the reward,” Icahn said, believing that creating the first true auto parts vertical will make the companies he is buying much more valuable.

Ultimately, an option is to debut IAG in an initial public offering, the investor said.

IAG paid about $125 million for Aamco—bringing to 1,900 the number of service centers it owns, a source estimates.

Also on the IAG drawing board are adding collision centers to Pep Boys locations.

Separately, Icahn owns 35 percent of Hertz Global Holdings and about 3 percent of ride-hailing company Lyft.

IAG services fleets including Hertz cars leased by Lyft drivers.

Meanwhile, the practice of monitoring bathroom brakes at IAG’s Auto Plus is no longer being done, Icahn said.

Icahn said he is spending millions of dollars training technicians on modern auto technology.

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