Advance Auto Parts Announces Closing of Acquisition of General Parts International, Inc.
ROANOKE, Va.–( BUSINESS WIRE )–Advance Auto Parts, Inc. (NYSE: AAP), a leading provider of automotive aftermarket parts, accessories, batteries, and maintenance items, announced today that it has ended the acquisition of General Parts International, Inc. (GPII). GPII is a leading privately held distributor and supplier of original equipment and aftermarket replacement products for commercial markets operating under the CARQUEST and WORLDPAC brands.
The transaction creates the largest automotive aftermarket parts provider in North America, with annual sales of over $9.Trio billion and more than 70,000 Team Members. The strong combined financial profile permitted for an all-cash transaction and supports Advance’s commitment to maintaining its investment grade ratings. The acquisition of General Parts accelerates Advance’s growth strategy and enhances shareholder value through the following strategic benefits:
- Creates Market Leader – Converts Advance into the #1 automotive aftermarket parts provider in North America with a balanced platform for growth inbetween Do-It-yourself (DIY) and Commercial, the #1 distributor of import automotive parts and the largest automotive aftermarket business-to-business e-commerce platform in North America.
- Supplies Scale – Provides Advance accomplish coast-to-coast coverage with approximately Five,300 company operated stores across North America, creating a company with scale, reach and expanded growth opportunities benefiting shareholders, customers and team members. This presence in fresh markets permits Advance the capability to expand its geographic footprint in an efficient manner.
- Accelerates Complementary Market Opportunities – Expands Advance’s product and category offerings in both core and fresh product lines (i.e. paint and powerful duty), creates fresh sales channel with independent customers and broadens capability to grow with attractive customer segments such as larger bay garages, import specialists, national accounts and fleet and government programs.
- Strengthens Leading Brands and Capabilities – Enhances Advance’s capability to serve customers through the transfer of CARQUEST’s commercial capabilities and Team Member parts skill into Advance stores while expanding DIY into select company operated CARQUEST stores. The combination expands key capabilities in customer service through enhanced daily replenishment and customer loyalty programs to a larger truck fleet and a significantly expanded commercial sales team.
“We are excited about the completion of this transaction and the chance it presents for our customers and the over 70,000 team members. This combination positions Advance as the largest automotive aftermarket provider of parts, accessories, batteries, and maintenance items in North America. Strategically it provides us with a compelling chance to expand our geographical presence, channels of distribution, and commercial capabilities to better serve customers and supply value to shareholders,” said Darren R. Jackson, Advance Auto Parts Chief Executive Officer.
As a result of the closing of this transaction, Advance will add to its operations thirty eight General Parts distribution centers, 1,248 company operated CARQUEST locations across the US and Canada and will service approximately 1,400 independently possessed CARQUEST locations primarily in the US and Canada. Advance will also add WORLDPAC, a leading importer and distributor of original equipment and quality aftermarket replacement automotive parts to import specialists in North America and Puerto Rico operating one hundred five facilities across the US and Canada, to its operations.
Mike Norona, Chief Financial Officer of Advance Auto Parts said, “We are pleased to have closed the transaction and are excited about the financial potential of this compelling combination as we leverage our fresh size and scale to create value for our shareholders, customers and Team Members.”
About Advance Auto Parts
Headquartered in Roanoke, Va., Advance Auto Parts, Inc., a leading automotive aftermarket retailer of parts, accessories, batteries, and maintenance items in the United States, serves both the do-it-yourself and professional installer markets. As of December 28, 2013, Advance operated Four,049 stores in thirty nine states, Puerto Rico, and the Cherry Islands. Extra information about AAP, employment opportunities, customer services, and online shopping for parts, accessories and other offerings can be found on the company’s website at www.AdvanceAutoParts.com.
Forward Looking Statements
Certain statements contained in this communication are forward-looking statements, as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address future events or developments, and typically use words such as believe, anticipate, expect, intend, plan, forecast, outlook or estimate. These forward-looking statements include, but are not limited to, the benefits and other effects of the transaction; the combined company’s plans, objectives and expectations; statements regarding AAP’s commitment and capability to maintain its investment grade credit rating; expected growth and future spectacle of AAP, including store growth, capital expenditures, comparable store sales, SG&A, operating income, gross profit rate, free cash flow, profitability and earnings per diluted share; expected financial results; and other statements that are not historical facts. These forward-looking statements are subject to significant risks, uncertainties and assumptions, and actual future events or results may differ materially from such forward-looking statements. Such differences may result from, among other things, the risk that the benefits of the transaction, including synergies, may not be fully realized or may take longer to realize than expected; the possibility that the transaction may not advance AAP’s business strategy; the risk that AAP may practice difficulty integrating GPII’s employees, business systems and technology; the potential diversion of AAP’s management’s attention from AAP’s other businesses resulting from the transaction; the influence of the transaction on third-party relationships, including customers, wholesalers, independently possessed and jobber stores and suppliers; switches in regulatory, social and political conditions, as well as general economic conditions; competitive pressures; request for AAP’s and GPII’s products; the market for auto parts; the economy in general; inflation; consumer debt levels; the weather; business interruptions; information technology security; availability of suitable real estate; dependence on foreign suppliers; and other factors disclosed in AAP’s 10-K for the fiscal year ended December 29, two thousand twelve on file with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements. AAP intends these forward-looking statements to speak only as of the time of this communication and does not undertake to update or revise them as more information becomes available.