Filing of Certain Prospectuses and Communications in Connection With Business Combination Transactions (425)
April 12 2018 - 5:04PM
Edgar (US Regulatory)
Filed by Genuine Parts Company
pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Filer: Genuine Parts Company
Subject Company: Genuine Parts Company
SEC File No.: 001-05690
Date: April
12, 2018
The
following FAQ was distributed by Genuine Parts Company to employees of the S.P. Richards business:
Employee
FAQ
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Our
parent company, Genuine Parts Company, announced a definitive agreement under which S.P.
Richards will combine with Essendant to form a new publicly traded company. This transaction
will effectively spin off S.P. Richards from Genuine Parts Company, allowing S.P. Richards
and Essendant to merge.
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Once
the transaction has been completed, Genuine Parts Company shareholders will continue
to own their existing shares in Genuine Parts Company and will also own approximately
51% of the new, combined company. Essendant shareholders will own approximately 49% of
the new, combined company.
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Together,
S.P. Richards and Essendant will be a stronger, more competitive business with greater
scale and service capabilities and an enhanced ability to support our customers and best
position our employees for the future.
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Essendant
is a leading distributor of business products headquartered in Deerfield, IL.
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Essendant
provides its customers with access to over 170,000 items, including janitorial and breakroom
supplies, technology products, traditional office products, industrial supplies, cut
sheet paper products, automotive products and office furniture.
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Like
S.P. Richards, Essendant serves a diverse group of customers, including independent resellers,
national resellers and e-commerce businesses.
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Essendant
shares our passion for serving customers and has a long history of delivering business
products to growing businesses, a record we look forward to continuing together as an
even stronger combined organization.
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3.
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Why
is S.P. Richards combining with Essendant?
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After
evaluating strategic options to best position S.P. Richards and our employees for the
future, the Genuine Parts Company Board and management team determined that this combination
with Essendant provided strategic benefits while creating value for Genuine Parts Company
shareholders.
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Bringing
together leadership and operational expertise from Essendant and S.P. Richards and combining
the best elements of each business’ operations will create an even stronger company
with the ability to harness our unique strengths and capitalize on opportunities to create
value, including:
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Greater
resources to support and partner with the independent dealer channel and resellers in
our other sales channels, and invest to drive enhanced value for customers, consumers
and shareholders;
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Expanded
product assortment of branded and private-label products across a broad set of categories;
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Consolidated
distribution network with greater efficiencies throughout the entire supply chain; and
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Optimized
ability to develop and offer innovative solutions in value-added marketing and analytics
services to strengthen independent reseller relationships and drive demand.
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We
have tremendous respect for Essendant and believe the combination with S.P. Richards’
strong, diversified business and talented team will bring together two highly complementary
cultures with a shared commitment to serving customers.
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Together,
we will be better able to help our customers succeed in the face of a challenging and
rapidly evolving market.
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4.
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What
are the benefits of this transaction for S.P. Richard’s employees? Will there be
any changes in staffing or layoffs as a result of the combination?
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It
is important to remember that we are still in the early stages of planning for this transaction,
and it’s too early to comment on specific changes that may take place following
the completion of the merger.
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As
with many transactions of this size, we expect there will be some overlap in functions
on both sides, and integration planning will focus on positioning the combined company
from a strategic and financial perspective.
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Both
businesses are focused on high performance and delivering results, and we expect this
will be taken into account as we plan for the integration of our two businesses.
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Overall,
for employees, the new company will have the scale and depth to compete more effectively
in the challenging and rapidly evolving business products market, which will better position
all employees for the future.
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Until
the transaction is completed, S.P. Richards will remain a part of Genuine Parts Company
and S.P. Richards and Essendant will continue to operate independently. In short, it
will be business as usual from an operations perspective leading up to closing.
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It
is important that you remain focused on your day-to-day responsibilities and delivering
reliable service to our customers.
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5.
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Who
will lead the combined company? Where will the company be headquartered?
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The
combined company will be led by a proven team that reflects the management strengths
and capabilities of both businesses.
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Upon
close of the transaction, Ric Phillips and Janet Zelenka of Essendant will respectively
serve as Chief Executive Officer and Chief Financial Officer of the combined company,
and Rick Toppin, S.P. Richards’ current Chief Executive Officer, will serve as
Chief Operating Officer.
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In
addition, Charles Crovitz, current Chairman of the Board of Essendant, will serve as
Chairman of the Board of the combined company. He will be joined by three Essendant-appointed
Directors, four Genuine Parts Company-appointed Directors, and four Directors appointed
by mutual agreement.
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The
new company will have dual headquarters in Atlanta, GA and Deerfield, IL.
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6.
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When
will the transaction be completed?
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We
expect this transaction to close before the end of 2018, subject to customary closing
conditions and regulatory approvals.
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Until
then, S.P. Richards will remain a part of Genuine Parts Company and S.P. Richards and
Essendant will continue to operate independently.
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In
short, it is business as usual for all of us and it is important that you remain focused
on your day-to-day responsibilities and delivering reliable service to our customers.
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7.
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What
is required in order to close the transaction?
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The
transaction is structured in a form called a Reverse Morris Trust, under which Genuine
Parts Company will go through a process to separate the S.P. Richards business prior
to combining it with Essendant.
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As
part of this process, we will need to obtain certain regulatory approvals and the approval
of Essendant shareholders.
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8.
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Explain
at a high level what the regulatory process might entail?
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As
is the case for many transactions in the U.S., the proposed combination will require
regulatory approval.
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This
process involves a filing with the antitrust regulators by both parties and an initial
review period.
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It
is not unusual in a transaction of this kind for the government to need additional time
to conduct its review. This can take several months.
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Until
the transaction is completed, S.P. Richards will remain a part of Genuine Parts Company
and S.P. Richards and Essendant will continue to operate independently. In short, it
is business as usual at S.P. Richards.
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9.
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What
are the integration plans? Will any of our distribution centers be closed during integration?
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In
the coming weeks, S.P. Richards and Essendant will form an integration planning team
consisting of leaders from both organizations to determine how best to bring our two
businesses together – this includes reviewing benefits plans and programs, merging
certain technology and integrating our teams and sales forces – to align and work
together toward the creation of a stronger combined company.
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We
will be appointing members to the integration team and expect that it will grow over
time as we get deeper into the planning process.
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While
not every employee will be a part of the integration planning team, you may be asked
by a supervisor or manager for information or support of the overall effort and we appreciate
your cooperation with any future request.
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Our
greatest priority should continue to be our customers and our commitment to providing
them with quality products and service, just as we always have.
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10.
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Will
there be any changes to employee compensation and benefit plans?
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Until
the merger is completed, S.P. Richards and Essendant will operate independently and it
remains business as usual. Your compensation and benefits will continue in the ordinary
course.
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We
are still in the early stages of planning for this transaction, and it’s too early
to comment on specific changes that may take place following the completion of the merger.
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In
the coming weeks, S.P. Richards and Essendant will form an integration planning team
consisting of leaders from both organizations to facilitate a seamless transition. Their
work will include decisions regarding compensation and benefits and other such employee
matters.
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11.
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What
happens to the shares of Genuine Parts Company stock that I own?
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Employees
that own Genuine Parts Company shares at the time of the closing of the S.P. Richards
and Essendant transaction will continue to own those Genuine Parts Company shares.
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The
shares you own in Genuine Parts Company as well as the dividend on your Genuine Parts
Company shares will stay the same after the close of the transaction.
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Upon
completing the combination of S.P. Richards and Essendant, employees who own Genuine
Parts Company stock will receive shares in the new combined company. The amount of shares
will depend on the number of Genuine Parts Company shares an individual employee owns
at the time of the transaction closing.
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Your
new shares will be automatically deposited into the accounts that currently hold your
Genuine Parts Company shares.
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It
is still early in the process and the valuation of the combined business will be clearer
as we move toward the close of the transaction. That said, we are confident that this
transaction will provide shareholders significant value through both the future upside
of the new company as well as Genuine Parts Company’s focus on its core businesses.
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12.
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What
will happen to the S.P. Richards name? What about S.P. Richards’ brands?
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The
new company will be called Essendant.
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Both
businesses enjoy solid branded and private-label products businesses with strong brand
equity among our respective customer bases. We expect the combined company to continue
leveraging these strengths across a broad set of categories.
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In
the coming weeks, S.P. Richards and Essendant will form an integration planning team
consisting of leaders from both organizations to determine how best to bring our
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two businesses together.
Decisions regarding our go-forward branding strategy, including our private-label products businesses, will be determined and
shared as we move through the process.
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13.
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What
should I say if asked about this transaction?
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As
is common with announcements like these, today’s news may lead to increased interest
in our business, and it is important that we speak with one voice. Please refer any media
or other external inquiries to Sid Jones, SVP of Investor Relations, at 678-934-5628
or Sid_jones@genpt.com.
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14.
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Who
can I contact if I have more questions?
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If
you have any further questions, please feel free to reach out to your manager.
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We
are committed to keeping you updated as there is important information to share.
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Your
manager will be meeting with you and discussing this news further.
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We
will continue to communicate developments as we move through this process. It’s
important to remember that until this transaction is finalized, it remains business as
usual at S.P. Richards.
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15.
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Would
S.P. Richards’ employees have the opportunity to be reassigned or apply to other
jobs within Genuine Parts Company? Do I have the option to stay with Genuine Parts Company
if I don’t want to go to the new company? Would I get severance if I don’t
want to go?
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It
is very early in the process and premature to be looking at job opportunities in other
local Genuine Parts Company businesses.
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Our
announced, dual HQ strategy in Deerfield and Atlanta is specifically intended to allow
for long-term career opportunities for S.P. Richards employees.
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We
need to continue to service our customers between now and closing – and every employee
is part of this commitment.
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The
talent of the S.P. Richards employee base is a key factor in the success of this combination.
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For
all of these reasons, we have agreed that S.P. Richards employees should not be considered
for Genuine Parts Company open positions at this time.
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We
are confident that the newly combined company formed by this merger will be better able
to compete over the long-term. This will better position employees for the future.
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Cautionary Statement
This document contains forward-looking
statements, including statements regarding the proposed business combination transaction between Genuine Parts Company (“GPC”)
and Essendant, Inc. (“Essendant”) in which GPC will separate its Business Products Group and combine this business
with Essendant. From time to time, oral or written forward-looking statements may also be included in other information released
to the public. These forward-looking statements are intended to provide management’s current expectations or plans for our
future operating and financial performance, based on assumptions currently believed to be valid. Forward-looking statements often
contain words such as “expects,” “anticipates,” “estimates,” “intends,” “plans,”
“believes,” “seeks,” “will,” “is likely to,” “scheduled,” “positioned
to,” “continue,” “forecast,” “predicting,” “projection,” “potential”
or similar expressions. Forward-looking statements may include references to goals, plans, strategies, objectives, projected costs
or savings, anticipated future performance, results, events or transactions of Essendant or the combined company following the
proposed transaction, the anticipated benefits of the proposed transaction, including estimated synergies, the expected timing
of completion of the transaction and other statements that are not strictly historical in nature. These forward-looking statements
are based on management’s current expectations, forecasts and assumptions. This means they involve a number of risks and
uncertainties that could cause actual results to differ materially from those expressed or implied here, including but not limited
to: the ability of GPC and Essendant to receive the required regulatory approvals for the proposed transaction and approval of
Essendant’s stockholders and to satisfy the other conditions to the closing of the transaction on a timely basis or at all;
the occurrence of events that may give rise to a right of one or both of GPC and Essendant to terminate the Merger Agreement;
negative effects of the announcement or the consummation of the transaction on the market price of GPC’s or Essendant’s
common stock and/or on its business, financial condition, results of operations and financial performance; risks relating to the
value of the Essendant shares to be issued in the transaction, significant transaction costs and/or unknown liabilities; the possibility
that the anticipated benefits from the proposed transaction cannot be realized in full or at all or may take longer to realize
than expected; risks associated with contracts containing consent and/or other provisions that may be triggered by the proposed
transaction; risks associated with transaction related litigation; the possibility that costs or difficulties related to the integration
of the businesses will be greater than expected; and the ability of the combined company to retain and hire key personnel. There
can be no assurance that the proposed transaction or any other transaction described above will in fact be consummated in the
manner described or at all. Stockholders, potential investors and other readers are urged to consider these risks and uncertainties
in evaluating forward-looking statements and are cautioned not to place undue reliance on the forward-looking statements. For
additional information on identifying factors that may cause actual results to vary materially from those stated in forward-looking
statements, please see GPC’s and Essendant’s reports on Forms 10-K, 10-Q and 8-K filed with or furnished to the SEC
and other written statements made by GPC and/or Essendant from time to time. The forward-looking information herein is given as
of this date only, and neither GPC nor Essendant undertakes any obligation to revise or update it.
Additional Information
In connection with the proposed
transaction, Essendant will file with the SEC a registration statement on Form S-4 containing a proxy statement/prospectus of
Essendant, and Rhino SpinCo, Inc. (“SpinCo”) a wholly owned subsidiary of GPC created for the proposed transaction,
will file with the SEC a registration statement on Form 10.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION
STATEMENTS, THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE, BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors and security holders will be able to obtain the registration statements
and the proxy statement/prospectus free of charge from the SEC’s website or from GPC or Essendant. The documents filed by
SpinCo with the SEC may be obtained free of charge at GPC’s website at www.genpt.com, at the SEC’s website at www.sec.gov
or by contacting GPC’s Investor Relations Department at (678) 934-5000. The documents filed by Essendant with the SEC may
be obtained free of charge at Essendant’s website at www.essendant.com, at the SEC’s website at www.sec.gov or by
contacting Essendant’s Investor Relations Department at (847) 627-2900.
Participants in the Solicitation
GPC, Essendant and their respective
directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation
of proxies in respect of the proposed transaction. Information about GPC’s directors and executive officers is available
in GPC’s proxy statement for its 2018 annual meeting of shareholders, which was filed with the SEC on February 27, 2018.
Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests,
by security holdings or otherwise, will be contained in the registration statements, the proxy statement/prospectus and other
relevant documents to be filed with the SEC regarding the proposed transaction. Information about Essendant’s directors
and executive officers is available in Essendant’s proxy statement for its 2017 annual meeting of stockholders, which was
filed with the SEC on April 12, 2017, its Annual Report on Form 10-K for the year ended December 31, 2017, which was filed with
the SEC on February 21, 2018, and its Current Reports on Form 8-K, which were filed with the SEC on May 2, 2017, June 13, 2017,
July 17, 2017, October 25, 2017, December 28, 2017 and March 8, 2018.
No Offer or Solicitation
This communication
shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities
in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
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