Positions Company as a Leading Automotive Parts Distributor
in Key European Markets
- Revenues of $1.7 Billion and
Gross Billings of $2.3 Billion
-
To Deliver Significant Sales Growth and Earnings Accretion
and Strong Platform for Sustainable Automotive Parts
Expansion
ATLANTA and LONDON, Sept. 25,
2017 /PRNewswire/ -- Genuine Parts Company (NYSE: GPC)
("the Company") and Alliance Automotive Group ("AAG"), a leading
European distributor of vehicle parts, tools and workshop
equipment, announced today that they have entered into a definitive
agreement under which Genuine Parts Company will acquire Alliance
Automotive Group from private equity funds managed by Blackstone
and AAG's co-founders. The acquisition is valued at a total
purchase price of approximately $2
billion (US$), including the repayment of AAG's outstanding
debt upon closing. The transaction has been approved by the Board
of Directors of GPC and is expected to close in the fourth quarter
of 2017, subject to the satisfaction of customary closing
conditions and applicable regulatory approvals.
AAG is the second largest parts distribution platform in
Europe, with a focus on light
vehicle and commercial vehicle replacement
parts. Headquartered in London, AAG has 7,500 employees and over 1,800
company-owned stores and affiliated outlets across France, the U.K. and Germany. AAG has a consistent track record of
organic revenue and earnings growth supported by strategic
investments based on a proven M&A strategy to gain scale,
efficiencies and geographic coverage.
AAG is expected to generate gross annual billings of
approximately $2.3 billion (US$)
including supplier direct billings, or $1.7
billion of revenue on a U.S. GAAP basis in 2017.
Additionally, the Company expects the acquisition to be immediately
accretive to earnings in the first year after closing. For 2018,
incremental diluted earnings per share is estimated at $0.45 to $0.50 and adjusted earnings per share is
estimated at $0.65 to $0.70, which
excludes the amortization of acquisition-related
intangibles. The Company expects to incur one-time transaction
costs in the fourth quarter of 2017.
Paul Donahue, Genuine Parts
Company's President and Chief Executive Officer, stated, "We are
excited to combine with AAG and enter the European markets with
critical scale and a leading market position in the automotive
aftermarket. AAG is poised to contribute significant sales growth
and earnings accretion to Genuine Parts Company and also serves to
enhance the GPC platform for long-term, sustainable expansion
across the global automotive parts industry. AAG has a strong
management team and a deep bench of talent, and our similar
cultures and histories make this acquisition an excellent strategic
fit. We are confident this business investment will create
significant value for our shareholders, and we welcome the AAG team
to the Genuine Parts family. We look forward to their future
contributions to our ongoing success."
Jean-Jacques Lafont, Chairman,
Chief Executive Officer and co-founder of Alliance Automotive
Group, said, "The AAG team has tremendous respect for Genuine Parts
Company and its well-deserved reputation as a long-standing leader
in the automotive parts industry. We are very pleased to
combine our two great businesses and leverage our collective
resources and expertise to accelerate growth. AAG's success is
a testament to the hard work and dedication of our wonderful
employees, without whom this transaction would not be possible. I
am confident that, together, we will achieve great things and
continue to provide the highest quality parts and service to our
combined customers across the globe."
Lionel Assant, Head of European Private Equity at Blackstone,
said, "Over the past three years, AAG has experienced tremendous
growth and transformed into one of Europe's leading automotive parts
distributors. We would like to thank AAG's management team led by
Jean-Jacques Lafont and Alistair Brown for their vision and leadership
as well as all its staff for their exceptional efforts. We
have no doubt that the business will go on to further growth under
Genuine Parts Company, which is the right partner to support AAG's
continued success."
The Company intends to finance the transaction, including the
pay-off of AAG's existing debt arrangements, with approximately
$2 billion of debt financing. This
will include the combination of new term loan agreements, new
multi-currency debt and an upsized revolving credit facility.
J.P. Morgan is acting as financial advisor to Genuine Parts
Company and Davis Polk &
Wardwell LLP is acting as legal counsel. Lazard and UBS are
serving as financial advisors to AAG and Linklaters LLP is
providing legal counsel.
Conference Call
Genuine Parts Company will hold a
conference call today at 11:00 a.m.
EDT to discuss today's announcement. Presentation materials
will be available before the start of the call. Interested
parties may listen to the call and access the presentation on the
Company's website, www.genpt.com, by clicking "Investors", or by
dialing 719-457-2600, conference ID 8095577. A replay will also be
available on the Company's website or at 844-512-2921, conference
ID 8095577, two hours after the completion of the call until
12:00 a.m. EDT on October 9, 2017.
Forward Looking Statements
Some statements in this
report, as well as in other materials we file with the Securities
and Exchange Commission (SEC) or otherwise release to the public
and in materials that we make available on our website, constitute
forward-looking statements that are subject to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Senior officers may also make verbal statements to analysts,
investors, the media and others that are forward-looking.
Forward-looking statements may relate, for example, to the
financing, timing and completion of the AAG acquisition and the
anticipated synergies and benefits of the transaction, as well as
future operations, prospects, strategies, financial condition,
economic performance (including growth and earnings), industry
conditions and demand for our products and services. The Company
cautions that its forward-looking statements involve risks and
uncertainties, and while we believe that our expectations for the
future are reasonable in view of currently available information,
you are cautioned not to place undue reliance on our
forward-looking statements. Actual results or events may differ
materially from those indicated as a result of various important
factors. Such factors may include, among other things, the
inability to complete the acquisition due to failure to satisfy the
customary closing conditions and/or the delay of or inability to
obtain all regulatory approvals related to the acquisition, the
Company's ability to successfully integrate AAG into the Company
and to realize the anticipated synergies and benefits, changes in
the European aftermarket, the Company's ability to successfully
implement its business initiatives in each of its four business
segments; slowing demand for the Company's products; changes in
legislation or government regulations or policies; changes in
general economic conditions, including unemployment, inflation or
deflation; changes in tax policies; volatile exchange rates; high
energy costs; uncertain credit markets and other macro-economic
conditions; competitive product, service and pricing pressures; the
ability to maintain favorable vendor arrangements and
relationships; disruptions in our vendors' operations; the
Company's ability to successfully integrate its acquired
businesses; the uncertainties and costs of litigation; disruptions
caused by a failure or breach of the Company's information systems,
as well as other risks and uncertainties discussed in the Company's
Annual Report on Form 10-K for 2016 and from time to time in the
Company's subsequent filings with the SEC.
Forward-looking statements are only as of the date they are
made, and the Company undertakes no duty to update its
forward-looking statements except as required by law. You are
advised, however, to review any further disclosures we make on
related subjects in our subsequent Forms 10-K, 10-Q, 8-K and other
reports to the SEC.
About Genuine Parts Company
Genuine Parts Company is
a distributor of automotive replacement parts in the U.S.,
Canada, Mexico and Australasia. The Company also
distributes industrial replacement parts in the U.S., Canada and Mexico through its Motion Industries
subsidiary. S. P. Richards Company, the Office Products
Group, distributes business products in the U.S. and Canada. The Electrical/Electronic Group, EIS,
Inc., distributes electrical and electronic components throughout
the U.S., Canada and Mexico.
Genuine Parts Company had 2016 revenues of $15.3 billion. Further information is
available at www.genpt.com.
About Alliance Automotive Group
Alliance Automotive
Group is a leading distributor of light and commercial vehicle
parts to the independent aftermarket in France, Germany and the UK, trading under the
Groupauto France, Précisium, Partners and Gef'Auto brands in
France, Groupauto UK, UAN and FPS
in the UK as well as Alliance Automotive Group Germany in
Germany. AAG serves approximately 30,000 garages with over
100,000 different parts for repair and maintenance from a network
of more than 300 company-owned stores and nearly 1,500 affiliated
outlets. Further information is available at
www.allianceautomotivegroup.eu.
About Blackstone
Blackstone is one of the world's
leading investment firms. We seek to create positive economic
impact and long-term value for our investors, the companies in
which we invest, and the communities in which we work. We do
this by using extraordinary people and flexible capital to help
companies solve problems. Our asset management businesses,
with over $370 billion in assets
under management, include investment vehicles focused on private
equity, real estate, public debt and equity, non-investment grade
credit, real assets and secondary funds, all on a global
basis. Further information is available at
www.blackstone.com. Follow Blackstone on
Twitter@Blackstone.
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