ATLANTA, Dec. 16, 2021 /PRNewswire/ -- Genuine Parts
Company (NYSE: GPC) ("GPC"), a leading distributor of automotive
and industrial replacement parts, announced today that it has
entered into a definitive agreement under which its wholly-owned
subsidiary, Motion Industries, Inc. ("Motion") will acquire Kaman
Distribution Group ("KDG") from private investment firm Littlejohn
& Co., LLC. The acquisition is valued at a total purchase price
of approximately $1.3 billion in
cash. The transaction is expected to close in the first quarter of
2022, subject to the satisfaction of customary closing conditions.
The waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 has expired.
![GPC Logo. (PRNewsFoto/Genuine Parts Company) GPC Logo. (PRNewsFoto/Genuine Parts Company)](https://mma.prnewswire.com/media/76327/genuine_parts_company_logo.jpg)
"We are excited to announce this strategic investment in our
Industrial business," said Paul
Donahue, Chairman and Chief Executive Officer of GPC.
"Motion's highly synergistic acquisition of KDG significantly
enhances our scale and further strengthens our market-leading
position. In addition, this combination creates opportunities for
accelerated long-term growth, profitability and cash flow. Our
Motion team, led by Randy Breaux, is
eager to bring together the world-class talent and industrial
expertise of these two organizations to build an even stronger
business. We look forward to extending our leadership position and
creating significant shareholder value together as a premier leader
in industrial solutions."
Established in 1971, KDG is a power transmission, automation and
fluid power industrial distributor and solutions provider with
operations throughout the U.S., providing electro-mechanical
products, bearings, power transmission, motion control and
electrical and fluid power components to MRO and OEM customers.
Headquartered in Bloomfield, CT,
KDG's 1,700 employees serve more than 50,000 customers.
KDG is expected to generate approximately $1.1 billion of revenue in 2022. Additionally,
GPC expects the acquisition to be accretive to its adjusted
earnings in the first year after closing. Other transaction
highlights include:
- $50M+ annual run-rate synergies, expected to be achieved over
three years
- Anticipated leverage at closing of ~2x, within range of GPC
targeted levels
- Funded at closing via existing revolver and accounts receivable
sales agreement
- Expected to maintain liquidity in excess of $2 billion
Ben Mondics, President and Chief
Executive Officer of KDG, stated, "Motion is a nationally
recognized brand and a market leader in industrial distribution. We
are very pleased to combine our two great businesses and leverage
our collective resources and expertise to accelerate profitable
growth. We appreciate the exceptional efforts of our employees who
make our company so great, and we are confident Motion is the
natural partner for continued long-term success."
Advisors
Greenhill & Co., LLC is acting as
financial advisor to GPC and King & Spalding is acting as legal
counsel. Baird is serving as financial advisor to KDG and
Gibson, Dunn & Crutcher LLP is
serving as legal counsel.
Conference Call
GPC will hold a conference call today
at 8:30 a.m. EDT to discuss today's
announcement. Presentation materials will be available before the
start of the call. Interested parties may listen to the call and
access the presentation on the Company's website. The call is also
available by dialing 877-407-0789, conference ID 13725692. A
replay will also be available on the Company's website or at
844-512-2921, conference ID 13725692, two hours after the
completion of the call.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains "forward-looking
statements" that are subject to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. All statements in
the future tense and all statements accompanied by words such as
"opportunities," "expected," "estimated," "anticipated," "look
forward," "position," "will," or similar expressions are intended
to identify such forward-looking statements. These forward-looking
statements include statements regarding the acquisition of KDG by
GPC's wholly-owned subsidiary, Motion, including those relating to
the revenue expected to be generated by KDG in 2022; the
expectation that the transaction will be accretive to GPC's
adjusted earnings in the first year after closing; the annual
run-rate synergies expected to be achieved by the transaction;
GPC's anticipated leverage and liquidity levels following the
closing of the transaction, including its ability to secure
permanent financing (and the amount thereof); and Motion's plans,
objectives, expectations, projections and intentions, particularly
with respect to opportunities for long-term growth, profitability,
cash flow and creating significant shareholder value following the
transaction; and other statements relating to the transaction that
are not historical facts. Forward-looking statements are based on
information currently available to GPC and involve estimates,
expectations and projections. Investors are cautioned that all such
forward-looking statements are subject to risks and uncertainties,
and important factors could cause actual events or results to
differ materially from those indicated by such forward-looking
statements. With respect to the proposed acquisition, these risks,
uncertainties and factors include, but are not limited to: the risk
that GPC may not be able to procure permanent financing relating to
the acquisition on favorable terms, if at all; the risk that KDG
will not be integrated successfully; the risk that the cost
savings, synergies and growth from the acquisition may not be fully
realized or may take longer to realize than expected; the diversion
of management time on transaction-related issues; and the risk that
costs associated with the integration of the businesses are higher
than anticipated.
Additional information regarding other risks and uncertainties
that may impact GPC and its operations are also contained in GPC's
most recent Annual Report on Form 10-K and subsequent Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K filed with the
Securities and Exchange Commission.
Many of these risks, uncertainties and assumptions are beyond
GPC's ability to control or predict. Because of these risks,
uncertainties and assumptions, actual results may vary materially,
and you should not place undue reliance on these forward-looking
statements. Furthermore, forward-looking statements speak only as
of the information currently available to the parties on the date
they are made, and GPC does not undertake any obligation to update
publicly or revise any forward-looking statements to reflect events
or circumstances that may arise after the date of such
communication, except as required by law.
About Genuine Parts Company
Founded in 1928, Genuine
Parts Company is a global service organization engaged in the
distribution of automotive and industrial replacement parts. The
Company's Automotive Parts Group distributes automotive replacement
parts in the U.S., Canada,
Mexico, Australasia, France, the United
Kingdom, Ireland,
Germany, Poland, the
Netherlands and Belgium.
The Company's Industrial Parts Group distributes industrial
replacement parts in the U.S., Canada, Mexico and Australasia. In total, the Company
serves its global customers from an extensive network of more than
10,000 locations in 15 countries. Genuine Parts Company had 2020
revenues of $16.5 billion. Further
information is available at www.genpt.com.
About Motion
With annual sales of over $6 billion, Motion is a leading industrial
distributor of more than 10 million items, including, bearings;
mechanical power transmission products; electrical and industrial
automation components; hose, belting, and gaskets; hydraulic and
pneumatic components; process pumps; industrial and safety
products; seals and accessories; and material handling products and
solutions. To increase customers' productivity, the Company offers
many valued-added services, including engineering, fabrication,
repair, and Industry 4.0 solutions across these product groups. In
addition, Mi Automation Solutions and Mi Conveyance Solutions were
formed to offer a wide range of specialized, related products and
innovative solutions for many applications.
Motion North America has over
500 locations, including 16 distribution centers, and Mi Asia
Pacific has nearly 200 locations, including eight distribution
centers in Australasia. With approximately 9,000 employees, Motion
serves more than 170,000 customers in the equipment and machinery,
food and beverage, pulp and paper, iron and steel, chemical, mining
and aggregate, petrochemical, automotive, semiconductor, wood and
lumber, medical and pharmaceutical industries.
Motion is a wholly owned subsidiary of Genuine Parts Company
(NYSE: GPC). Visit our website at www.Motion.com.
About Kaman Distribution Group
Headquartered in
Bloomfield, Connecticut, KDG is a
leading national distributor of highly engineered products and
provider of related services with approximately 220 locations
across the United States and
Puerto Rico. Established in 1971,
KDG's technical salesforce has been servicing its customers for
over 50 years, providing components and systems for a broad range
of applications, along with value-added automation, engineering and
integration services. For more information about KDG, visit
ec.kamandirect.com/storeus/kamandistribution.
About Littlejohn & Co., LLC
Littlejohn & Co., LLC is a Greenwich,
Connecticut-based investment firm focused on private equity
and debt investments primarily in middle market companies. With
approximately $14 billion of
regulatory assets under management, the firm seeks to build
sustainable success for its portfolio companies through a
disciplined approach to engineering change. For more information
about Littlejohn, visit www.littlejohnllc.com.
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SOURCE Genuine Parts Company