AutoZone to Acquire Parts Distributor Interamerican Motor
AutoZone, Inc. (AZO) announced the signing of an agreement to acquire Interamerican Motor Corporation (:IMC) from Wulf Gaertner Autoparts AG, Germany. Notably, Interamerican Motor is the second largest distributor of original equipment quality import replacement parts in the U.S. Wells Fargo & Company (WFC) will be the exclusive financial advisor to IMC for this transaction.
IMC was established in 1962. The company operates in 17 locations and offers a wide range of original vehicle parts.
The collaboration is expected to benefit AutoZone to a great extent. AutoZone's product portfolio will gain from IMC’s leading position in the import car parts business. Also, AutoZone’s wide footprint, enhanced customer service, and operational expertise together with IMC’s leading position will drive growth opportunities for the former. Meanwhile, the retail and commercial customers will benefit from the expansion of the IMC brand in the U.S.
Wulf Gaertner Autoparts is a producer of high quality replacement parts for the automotive aftermarket. It supplies products under MEYLE and MEYLE HD brands for vehicles in Europe and Asia. The divestiture of IMC by Wulf Gaertner reflects its intention to focus on producing high quality automotive replacement parts.
AutoZone has a strong financial position which enables the company to undertake acquisitions and pursue share buybacks. Recently, AutoZone’s board of directors authorized an additional buyback of up to $750 million under its share repurchase program.
The company had cash and cash equivalents of $145.3 million as of May 10, 2014. Notably, AutoZone remains focused on enhancing shareholders’ returns, while simultaneously maintaining adequate liquidity for its business strategies.
AutoZone holds a Zacks Rank #3 (Hold). Better-ranked stocks that warrant a look include CarMax Inc. (KMX) and O’Reilly Automotive Inc. (ORLY). CarMax sports a Zacks Rank #1 (Strong Buy) while O’Reilly carry a Zacks Rank #2 (Buy).
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