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Advanced Auto Parts Spends $2 Billion to Become Biggest Auto Parts Retailer in North America

By  +Follow October 16, 2013 8:43AM
Tickers Mentioned:

Advanced Auto Parts (AAP) is making a move to become the biggest player in the North American auto parts industry, saying on Wednesday that it has agreed to acquire privately held General Parts International, Inc. in an all-cash deal with an enterprise value of $2.04 billion. With the purchase, Advanced Auto Parts will add 1,246 corporate-owned stores and 1.418 independently owned Carquest locations, giving it a platform and scale across the continent. General Parts also owns Worldpac, a supplier of replacement parts for imported vehicle brands.

The merge company will have annual sales of $9.2 billion, edging past current leader AutoZone Inc. (AZO) , which recorded about $9 billion in sales for the year ended August 31.

Advanced expects the acquisition will result in about $160 million in annual run-rate synergies that will be realized three years after closing.  The company also expects increased free cash flow and deliver estimated fiscal 2014 earnings per share accretion in excess of 20 percent, less one-time expenses.

Both boards have approved the transaction, which is expected to close late this year or early in 2014.

O. Temple Sloan, III, is expected to join the board at Advanced Auto Parts and will retain his position as president of General Parts, reporting to Advanced chief executive Darren Jackson. The combined company will remain headquartered in Roanoke, Virginia, the current home of Advanced, although it will keep its presence in Raleigh, North Carolina (General’s headquarters) as well.

“This transformational transaction provides a compelling strategic opportunity for Advanced to expand our geographic presence and commercial capabilities to better serve customers,” said Jackson in a statement this morning.

“The combination with Advance Auto Parts is the next logical step in our company’s evolution. Advance’s retail presence, strong capability infrastructure and acquisition integration experience combined with GPII’s leadership in the commercial, independent and import segments creates a powerful platform to drive profitable growth,” added Sloan.

Advanced has bought its way to become the biggest auto parts player in North America to offset tepid sales as booming auto sales are keeping fewer people from needing replacement parts.  In December the company bought BWP Distributors for an undisclosed cash amount.  As part of that deal, Advanced picked-up 124 BWP company-owned stores transferred the rights to distribute to 92 independently owned locations to an affiliate of General Parts.

Wall Street is cheering the acquisition, sending shares of AAP roaring ahead 16 percent to $96 in morning trading, including printing a new to all-time high at $99.30.  Through Tuesday’s close at $82.50, shares were up about 15 percent so far in 2013.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.

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Results for AAP
22 Sep 14 06:20:14
AutoZone sales disappoint as customers prefer new cars to repairs http://t.co/t02nypVsqP $AZO $ORLY $AAP $S500 $DJI $COMP $NDX
22 Sep 14 06:06:50
Commented on StockTwits: Supply was key. If supply was not there he may have been correct. Same with Munster $aap... http://t.co/E0IdQ85qAY
22 Sep 14 04:44:02
Moved Lower Bollinger Band $AAN $AAP $AGO $ANR $APOL $BAX $BSAC $CAT $CIT $CNP $COWN $CSC $CSG $CTRX $CYT $DDD $ECA http://t.co/d2j3XNfLuP
21 Sep 14 13:05:53
$AAP (09/21/2014) http://t.co/S7WgvIXi0Y
20 Sep 14 16:18:36
$AAP (09/20/2014) http://t.co/u20dtSufgN
20 Sep 14 09:02:48
Moved Lower BB 1/3 $AAN $AAP $AGO $ALLE $ANR $APOL $ARW $BAX $BSAC $CAT $CIT $CNP $COWN $CSC $CSG $CTRX $CYT $DDD http://t.co/KGkZsFtRyv
20 Sep 14 02:38:41
remain long $SLXP (new leader and solid week +14.5%), $TRN, $FB, $PRXL, $CELG, $MEOH, $IDTI, $AAP (not looking good)
Darlene S Williams
19 Sep 14 13:27:43
19 Sep 14 09:27:06
$TSLA $AAP $SCTY Are households the new market for Tesla? http://t.co/lamoJwTlby
Market Int Center
19 Sep 14 09:09:04
Advance Auto Parts $AAP Showing Resistance Near $135.00 ( http://t.co/kTkHOFGyXS )
Day Trade Alerts
19 Sep 14 07:36:47
via #AlertTrade SHORT Seller Alert $AAP - ADVANCE AUTO PARTS #ShortSeller #Stocks http://t.co/VS8RO1bzXJ
Alysia Sarkisian
18 Sep 14 23:24:13
RT @SeekingAlpha: What Do Mixed Expectations Imply For AutoZone? http://t.co/XLHJtjikzo $AAP $AZO
Traffic Generator
18 Sep 14 23:22:47
RT @SeekingAlpha: What Do Mixed Expectations Imply For AutoZone? http://t.co/XLHJtjikzo $AAP $AZO
Seeking Alpha
18 Sep 14 23:17:03
What Do Mixed Expectations Imply For AutoZone? http://t.co/XLHJtjikzo $AAP $AZO
Market Int Center
18 Sep 14 11:30:53
Advance Auto Parts $AAP Trading Near $136.82 Resistance Level ( http://t.co/mCeY0zDfOf )
Bill Gunderson
18 Sep 14 07:04:17
Getting a BUY SIGNAL today on $AAP Good Peg Ratio and Performance. #147 overall. Mid-Cap No position.
Samuel Brown
17 Sep 14 10:02:01
$AAP Construction on Advance Auto Parts underway http://t.co/cnAcHl27ji
16 Sep 14 18:22:42
RT @dividenddotcom: Stocks going ex-dividend tomorrow (9/17): $MAIN $AAP $AVGO $CB $DSW
16 Sep 14 06:43:26
@dividenddotcom $MAIN (attractive div yield = 6,21%; Last 12 months payments:15); $AAP and $AVGO and $CB and $DSW are unattractive; All< 3 %
16 Sep 14 06:36:59
Stocks going ex-dividend tomorrow (9/17): $MAIN $AAP $AVGO $CB $DSW
Sleek Money
16 Sep 14 05:54:28
Advance Auto Parts, Inc. to Issue Quarterly Dividend of $0.06 on October 3rd $AAP http://t.co/U4NJzVUvc9
Margaret Bogenrief
16 Sep 14 05:00:47
http://t.co/QW3mcMw7oP Short Interest in American Apparel Decreases By 1.2% (APP) $AAP
US Banking News
15 Sep 14 06:19:06
Analysts Give Average Rating of Buy to Advance Auto Parts $AAP http://t.co/hJv5ZKvmEy
Ticker Report
15 Sep 14 02:44:32
Advance Auto Parts Receives “Outperform” Rating from Wedbush $AAP http://t.co/GtqZf4x2ZB
14 Sep 14 18:17:47
http://t.co/hjgLwIcNgz leahanne: $AAP Advance Auto Parts Inc (AAP) 133.86 -0.56: leahanne http://t.co/2Zgu4mXIYe http://t.co/hjgLwIcNgz
14 Sep 14 10:09:49
$GDX Gold Miners ETF Market Vectors (GDX) 23.88 -0.39 (-1.61%) $AAP $XIV $FDX http://t.co/9277FgMmrC
Investors Hangout
14 Sep 14 09:14:05
Emylers: $AAP Up to date company activities and other http://t.co/47ZO6kzBBM
Investors Hangout
14 Sep 14 09:14:04
Emylers: $AAP Up to date company activities and other http://t.co/h8ZHbUVh5i
14 Sep 14 09:01:12
http://t.co/vVojvVrNNL Emylers: The Launch Pad: $AAP Up to date company activities and other http://t.co/qOiUbSQ5M4
14 Sep 14 09:00:23
$AAP Up to date company activities and other important information about $AAP http://t.co/GpGt6pU7Wq
Investors Hangout
14 Sep 14 08:03:40
leahanne: $AAP Advance Auto Parts Inc (AAP) 133.86 -0.56 http://t.co/RU8HRLR4Pf
Investors Hangout
14 Sep 14 08:03:40
leahanne: $AAP Advance Auto Parts Inc (AAP) 133.86 -0.56 http://t.co/ZQv5YsPOve
14 Sep 14 08:00:20
$AAP Advance Auto Parts Inc (AAP) 133.86 -0.56 (-0.42%) $EA $CECO $AMAT http://t.co/cy1U9NtM5e
14 Sep 14 07:58:18
$QTMM Quantum Matls Corp (QTMM) 0.2260 -0.0040 (-1.74%) $WLT $XLV $AAP http://t.co/6Uxr4dge1f
14 Sep 14 07:17:50
$EA any other opinions on this? $BNS.TO $PPC $BMSN $TA.TO $AAP http://t.co/ysdPMeznbT
14 Sep 14 06:52:47
SDS Stock Chart $SDS $AAP $BRCM $SMH http://t.co/1UV0vXUv2T http://t.co/2XdxYyA8V7
By  +Follow October 16, 2013 8:43AM



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