Genuine Parts To Acquire Alliance Automotive Group In Approx. $2 Bln Deal

(RTTNews) - Genuine Parts Company (GPC) and Alliance Automotive Group, a European distributor of vehicle parts, tools and workshop equipment, announced they have entered into a definitive agreement under which Genuine Parts 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.

Headquartered in London, Alliance Automotive Group has 7,500 employees and over 1,800 company-owned stores and affiliated outlets across France, the U.K. and Germany. AAG is the second largest parts distribution platform in Europe, with a focus on light vehicle and commercial vehicle replacement parts.

Genuine Parts said AAG is expected to generate gross annual billings of approximately $2.3 billion including supplier direct billings, or $1.7 billion of revenue on a U.S. GAAP basis in 2017. Additionally, Genuine Parts 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.

Genuine Parts 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. The transaction has been approved by the Board of Genuine Parts and is expected to close in the fourth quarter of 2017.