Advance Auto Parts, Inc. (NYSE: AAP), a leading provider of automotive aftermarket parts, accessories, batteries, and maintenance items, announced today that it has entered into a definitive agreement to acquire General Parts International, Inc. (GPII), a leading privately held distributor and supplier of original equipment and aftermarket replacement products for commercial markets operating under the CARQUEST and WORLDPAC brands, in an all-cash transaction with an enterprise value of $2.04 billion. The transaction has been approved by the boards of directors of both companies.
The transaction creates the largest automotive aftermarket parts provider in North America, with annual sales of over $9.2 billion and more than 70,000 Team Members. The strong combined financial profile allows for an all-cash transaction and supports Advance’s commitment to maintain its investment grade rating. The acquisition of GPII will accelerate Advance’s growth strategy and enhance shareholder value through the following strategic benefits:
- Creates Market Leader – (1) #1 automotive aftermarket parts provider in North America with a balanced platform for growth between Do-It-yourself (DIY) and Commercial, (2) #1 distributor of import automotive parts and (3) the largest automotive aftermarket business-to-business e-commerce platform in North America.
- Delivers Scale – Provides Advance with complete coast-to-coast coverage across North America, creating a company with scale, reach and expanded growth opportunities benefiting shareholders, customers and team members. This presence in new markets allows Advance the ability to expand its geographic footprint in an efficient manner.
- Accelerates Complementary Market Opportunities – Expands Advance’s product and category offerings in both core and new product lines (i.e. paint and heavy duty), creates new sales channel with independent customers and broadens ability 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 ability to serve customers through the transfer of CARQUEST’s commercial capabilities and Team Member parts knowledge 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.
Darren Jackson, Chief Executive Officer of Advance Auto Parts states O. Temple Sloan, III President of General Parts International, Inc. will continue as President of GPII, reporting to Mr. Jackson and is expected to join the Advance Auto Parts Board of Directors. The combined company will be headquartered in Roanoke, Virginia and will continue to maintain a presence in Raleigh, N.C.