A potential acquisition deal could be as soon as end of summer with a cash bid as high as $10 billion or more
Atlanta and Springfield, Mo.—Atlanta-based Genuine Parts Co. (GPC) has the interest of O’Reilly Auto Parts, headquartered in Springfield, Mo., with a cash bid that could be valued as high as $10 billion or more, according to Bloomberg News, which first reported the news last week on Thursday.
A purchase — with a potential deal in place by the end of the summer — would be O’Reilly’s largest acquisition since bringing CSK Auto Corp. under its umbrella for approximately $1 billion, stated Bloomberg, which noted that the interest comes during a time of market uncertainty as the industry faces high costs and volatility.
Earlier this year in February, GPC stated it was working with JPMorgan Chase & Co. to separate the auto parts business from the industrial business, according to the Bloomberg report, which also noted that GPC Chairman and CEO Will Stengel said that splitting the company would simplify operations and provide long-term value for business-specific investments.
Market research and investment firm Evercore ISI, during a market overview presentation at a National Automotive Task Force meeting last November attended by Aftermarket Matters Weekly, had forecasted early on that GPC might divide the company.
The firm’s senior managing director, Greg Melich, mentioned at the time that GPC had brought on two new board members, one from Grainger and a former CIO from The Home Depot, who started to push Genuine Parts to split its automotive business from the industrial business.
“I don’t think anything is going to happen for the next six months,” Melich told attendees. “But keep an eye on it. They have a very good industrial business that’s basically not getting valued highly enough. It’s been weighted down … by some of the challenges at Napa.”
Comments are closed.