Genuine Parts Company (GPC) revealed that it will acquire the remaining 70% stake of Exego Group – a leading aftermarket distributor of automotive replacement parts and accessories in Australasia – for $800 million, including the assumption of certain debt.
On Jan 1, 2012, Genuine Parts Company acquired a 30% stake in Exego and held the option to acquire the remaining shares of the company later. The company will purchase the remaining stake using a combination of cash and debt. The transaction is expected to close on Apr 1, 2013.
Formed in 1922 and headquartered in Melbourne, Australia, Exego Group has annual revenues of more than $1 billion. It owns stores at more than 430 locations across Australia and New Zealand. Genuine Parts Company believes the acquisition will help the company enjoy significant growth opportunities in the Australasian aftermarket.
Genuine Parts Company, a Zacks Rank #3 (Hold) stock, posted a 19.8% rise in earnings to $1.03 per share in the fourth quarter of 2012 from 86 cents in the corresponding quarter of 2011, beating the Zacks Consensus Estimate by 10 cents. Net income increased 18.7% to $160.2 million from $135.0 million in 2011.
Revenues went up 3.5% to $3.1 billion, which compared with the Zacks Consensus Estimate of $3.2 billion. The revenue increase was driven by a respectable sales growth in three of the company’s four businesses.
Few stocks that are performing well in the industry where Genuine Parts operates include STRATTEC Security Corporation (STRT), Gentherm Incorporated (THRM) and Standard Motor Products Inc. (SMP). Gentherm and STRATTEC Security are Zacks Rank #1 (Strong Buy) stocks while Standard Motor Products carries a Zacks Rank #2 (Buy).
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