Aftermarket auto parts distributor Genuine Parts (NYSE:GPC) says it will acquire, for $800 million including debt, the remaining 70% of Exego Group it doesn't already own. Exego is also an aftermarket auto parts company that operates 430 stores across Australia and New Zealand, and has more than $1 billion in annual revenues.
Genuine Parts purchased a 30% stake in Exego on Jan. 1, 2012, for $166 million, and held the option to acquire the remaining shares at a later date, subject to the auto parts supplier meeting certain earnings thresholds. It contributed approximately $8 million in non-operating income to Genuine Parts in 2012.
The chairman and CEO of Genuine Parts, Tom Gallagher, said Exego exceeded expectations for growth and earnings so "based on our positive experience over the last 14 months with Exego, we believe that 100% ownership of their company best positions us to participate in the ongoing and significant growth opportunities in the Australasian aftermarket."
Genuine Parts is a distributor of automotive replacement parts and accessories in the U.S., Canada, and Mexico, and had revenues of $13 billion in 2012. It expects to finance the balance of the purchase using a combination of cash and borrowings with the deal closing on April 1.
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