Genuine Parts (GPC 101.37, +0.06, +0.1%) announced this
morning acquisitions for both its Industrial Group, Motion Industries, and its
U.S. Automotive Parts Group.
GPC is a distributor of automotive replacement parts in North America and globally, including in Australasia, France, the U.K., Germany, and Poland. The company also distributes industrial replacement parts and electrical and electronic materials in North America through its Industrial Parts Group. Its business products unit subsidiary S. P. Richards Company distributes a variety of business products in the U.S. and Canada. As of 2017, GPC reported revenues of $16.3 bln.
Firstly, GPC’s Motion Industries has entered into a definitive agreement to acquire Hydraulic Supply Company (HSC). HSC is a full-service fluid power distributor with a broad product offering of hydraulic, pneumatic, and industrial components and systems. HSC operates from 30 locations primarily in the southeastern U.S., which are supported by one central distribution center. HSC is expected to generate estimated annual revenues of $85 mln.
In addition, GPC has entered into a definitive agreement to acquire Hastings Auto Parts. (Hastings). Hastings, based in the Detroit, Michigan area, will add four stores to GPC’s distribution footprint and further expand its presence in the Detroit market. The company expects Hastings to generate approximate annual revenues of $10 mln.
Both agreements have effective close dates of October 1, 2018.
These deals come a little over a calendar week after news that GPC would not make any counterproposals to Staples’ (SPLS) offer to acquire Essendant (ESND 12.81, flat). Staples, which owns about 11.2% of ESND already, won the bid by offering $11.50 per share – below GPC’s $12.80 per share offer. As such, ESND is required – per the now void Merger Agreement – to pay GPC a $12 mln termination fee, which Staples is now going to pay as part of its new Merger Agreement with ESND.
GPC is about four weeks out from reporting third quarter results, but no exact release date has yet been confirmed. Shares are on the up-and-up since the Q2 report, which saw GPC beat on the top and bottom lines and raise revenue guidance for the full year.
The stock sits more than 5% higher from the open the day after the Q2 print and holds about the same gains YTD, as a quick move higher to start January followed by a move into negative territory in the following months has the stock resetting its ground into the fall season.
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