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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
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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
Market Int Center
30 Sep 14 11:13:15
Advance Auto Parts $AAP Showing Support Near $127.32 ( http://t.co/ua3XfiUsQI )
The Fly
30 Sep 14 07:03:57
$ACN $AAP $ANGI $AAPL $AZO $BSX $CDW $CTSH $EPAM $JASO $KEX $MOKO $MDT $NXTD $ORBC $PPL $RRC $STJ $TUES $ECOL ... http://t.co/T6C5BVA1xt
Spciality Strs Feed
30 Sep 14 05:15:01
Advance Auto Parts Research Coverage Started at William Blair (AAP) $aap http://t.co/Yzv5KTZUkR http://t.co/IrktEbW1XJ
Consumer Services
30 Sep 14 05:15:00
Advance Auto Parts Research Coverage Started at William Blair (AAP) $aap #consumerservices http://t.co/726TgbLips http://t.co/yVunBjJw9C
Ticker Report
30 Sep 14 05:14:56
Advance Auto Parts Research Coverage Started at William Blair $AAP http://t.co/UhhggQQQxF
US Banking News
30 Sep 14 05:05:41
Analysts’ New Coverage for September, 30th $AAP, AAPL, ANGI, BSX, CCH, CHH, ECOL, EPAM, GOAL, KEX http://t.co/1E2WUmnmD1
US Banking News
30 Sep 14 05:05:31
Advance Auto Parts Receives New Coverage from Analysts at William Blair $AAP http://t.co/nI1QIK6RsF
US Consumer News
30 Sep 14 04:37:53
Advance Auto Parts initiated by William Blair at outperform. http://t.co/TKva4WBWFC $AAP #AAP
Analyst Ratings
30 Sep 14 04:35:01
Advance Auto Parts initiated by William Blair at outperform. http://t.co/n9oe00m4Uy $AAP #AAP
Evener Investment
30 Sep 14 04:23:50
RT @MarketCurrents: William Blair backs Advance Auto Parts for gains http://t.co/DYv3qdUvpb #premarket $AAP
MarketCurrents
30 Sep 14 04:16:30
William Blair backs Advance Auto Parts for gains http://t.co/DYv3qdUvpb #premarket $AAP
Media Sentiment
30 Sep 14 03:39:50
$AAP received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 49
SIAnalystWire
30 Sep 14 03:34:55
William Blair Starts Advance Auto Parts $AAP at Outperform http://t.co/b5fXb4zLzf
Learnstocks101
29 Sep 14 16:00:03
Free video w/setups for September 30 "Now What" $AAP L $LNKD $GPRO $BIDU http://t.co/QJhIFSYV2Q
Market Int Center
29 Sep 14 11:07:08
Advance Auto Parts $AAP Trading Near $131.41 Resistance Level ( http://t.co/4KDqB4u3Z8 )
Peter Bardens
29 Sep 14 10:30:46
$AAP Advance Auto Parts Recognized with 2014 AAIA Head of Class Award for ... http://t.co/jp7xbkSh1s
innov8v
27 Sep 14 02:52:33
remain long into the week w/ $IDTI $MEOH $FB $AAP $CELG $TRN $PRXL $SSO no new entries...
Seeking Alpha
26 Sep 14 15:05:08
There Is Still Not Much To Like At Pep Boys http://t.co/jQ0sYVQthI $AAP $ORLY $PBY
Daily Contracts
26 Sep 14 07:41:01
Real-Time feed of company contracts, original agreements and executive updates from Advance Auto Parts $AAP http://t.co/h0OSTwtTCY
Media Sentiment
25 Sep 14 12:54:54
$AAP received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 311
Market Int Center
25 Sep 14 12:50:24
Advance Auto Parts $AAP Showing Bearish Technicals With Resistance At $131.82 ( http://t.co/f3FGh00SkJ )
Lach 14
25 Sep 14 10:06:13
Volatility rocks. $UVXY now up a stunning +16% on the day. PLace to be as terrorist alerts peak out and $AAP -3.2% and 13% of QQQ
wendy rocklein
25 Sep 14 09:49:28
Holiday retail sales forecast to rise 4.5% http://t.co/uwVWX0anBw $UPS $FDX $AAP $AEO
Thomas Collins
25 Sep 14 09:31:47
$AAP Ex-Dividend Reminder: Advance Auto Parts, Convergys and QTS Realty Trust http://t.co/j6Z1oTu9yQ
Bill Gunderson
25 Sep 14 08:07:25
The BUY SIGNAL on $AAP was short-lived. It is back to a sell-signal. No position. #489 overall.
Clair Voight
25 Sep 14 08:01:22
$AAP Ex-Dividend Reminder: Advance Auto Parts, Convergys and QTS Realty Trust http://t.co/kn74zvIcTW
John Turner
25 Sep 14 08:01:22
$AAP Advance Auto Parts Inc (AAP) Ex-Dividend Date Scheduled for September 17 ... http://t.co/vYXBmtxh0D
Seeking Alpha
25 Sep 14 06:15:10
More Evidence Of A Slowdown In DIY Auto Repairs http://t.co/TZMFd4CuQO $AAP $AZO
Daily Contracts
24 Sep 14 10:21:01
Real-Time feed of company contracts, original agreements and executive updates from Advance Auto Parts $AAP http://t.co/h0OSTwtTCY
ofahfans.com
24 Sep 14 05:45:18
RT @SeekingAlpha: Autozone: Appeal Increases, But I Am Not Pulling The Trigger Yet http://t.co/VI3cYEFQXv $AAP $AN $F $GM $KMX $AZO
Seeking Alpha
24 Sep 14 05:35:37
Autozone: Appeal Increases, But I Am Not Pulling The Trigger Yet http://t.co/VI3cYEFQXv $AAP $AN $F $GM $KMX $AZO
$Stocknewsalerts
24 Sep 14 05:33:01
$AAP Advance Auto Parts Recognized with 2014 AAIA Head of Class Award for Commitment to Team Member Education From our Stock News Alerts App
NASDAQ
24 Sep 14 05:31:13
$AAP - Advance Auto Parts Recognized with 2014 AAIA Head of Class Award for Commitment to Team Member Education http://t.co/Yb7EzKrp9F
BV Services
24 Sep 14 05:30:09
$AAP Advance Auto Parts Recognized with 2014 AAIA Head of Class Award for Commitment to Team Member Ed.. http://t.co/iEx6p5C9tw
Auto Binary option
24 Sep 14 05:20:59
RT @MarketCurrents: Holiday retail sales forecast to rise 4.5% http://t.co/F0ANLLu5qK #premarket $UPS $FDX $AAP $AEO
MarketCurrents
24 Sep 14 05:13:35
Holiday retail sales forecast to rise 4.5% http://t.co/F0ANLLu5qK #premarket $UPS $FDX $AAP $AEO
John Ablemann
23 Sep 14 13:01:43
$AAP Don't Fear a Dip From AutoZone and Other Auto Parts Store Stocks - Embrace It ... http://t.co/UpCkwztXRw
Kym L
23 Sep 14 09:36:57
$AAP over that TL looking pretty good
The allCity Trader
23 Sep 14 08:53:00
$AAP looking pretty weak so far
The allCity Trader
23 Sep 14 08:06:17
$AAP this held up well yestderday - needs to close above 50dma
Day Trade Alerts
22 Sep 14 13:06:18
RT @OpenOutcrier: $GTAT surprisingly worked, even though they have a similar $AAP rumor every other day.
Club retreats
22 Sep 14 10:44:34
@cvpayne #askpayne appreciate advice on $AAP $MELI $QIHU $ARII $CMCM $FFIV $FLML $IDTI $RAD $SIMO $SINA $SSYS $SYNA $DATA $TASR Thank you
				
				
By  +Follow October 16, 2013 8:43AM
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