GPC acquires AAG from Blackstone
Genuine Parts Company (GPC) has entered into a definitive agreement which will see it 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 $2bn, 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 UK and Germany. AAG has a consistent track record of organic revenue and earnings growth supported by strategic investments based on a proven mergers and acquisitions strategy to gain scale, efficiencies and geographic coverage.
AAG is expected to generate gross annual billings of approximately $2.3bn including supplier direct billings. Additionally, the company expects the acquisition to be immediately accretive to earnings in the first year after closing.
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.’
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.’
The Company intends to finance the transaction, including the pay-off of AAG’s existing debt arrangements, with approximately $2bn of debt financing. This will include the combination of new term loan agreements, new multi-currency debt and an upsized revolving credit facility.