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BREAKING: AAG ACQUIRED BY GENUINE PARTS COMPANY

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BREAKING: AAG ACQUIRED BY GENUINE PARTS COMPANY


BREAKING:  The following statement has been released by Genuine Parts Company:

ATLANTA and LONDON, September 25, 2017 — 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, 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

 

We’ll have more analysis on this breaking story soon.

 

 

 

 

 

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GAU PARENT ACQUIRES FRENCH BREAKERS’ YARDS

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GAU PARENT ACQUIRES FRENCH BREAKERS’ YARDS


equipe-geneve-devant-facade-2Alliance Automotive Group has announced that it has acquired Geneve Occasion, a large-scale dismantler of end-of-life vehicles. The facility has outlets in the French towns of Niort and la Rochelle.

This acquisition is part of a new development in the Group’s to expand its scope of activity in the parts recycling sector. Beginning 1st of January of 2017, a law on ‘energy transition’ in France requires all professionals involved in the maintenance and repair of vehicles to offer consumers recycled parts or remanufactured parts.

Despite the name, Geneva Occasion has no connection with Switzerland. Annually, the business dismantles 6,000 light vehicles and indexes the core and body panels for traceability. Company President Francois Logeay will remain with the firm following the transition to the new owner.

“Our Group will be an important actor in this sector,” commented Eric Girot, Managing Director of Alliance Automotive Group – France.   “This investment will enable us to meet the future needs of our distribution networks, namely Groupauto, Partners, Precisium Gef’Auto as well as our repairer networks and insurance partners. Geneva Occasion’s performance is built upon a long and solid relationship with insurers. By means of this acquisition, we intend to offer a ready-made solution for customers looking for structured channels in the spare parts recycling sector” he said.

The acquisition follows on from a string of high-profile acquisitions by AAG in recent months. Notably, the Group acquired wholesaler FPS along with Apec Braking and BTN Turbo from Lookers PLC in August.

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