BOUCHERVILLE, Que. — Uni-selec has reached agreement to sell its U.S. automotive parts distribution business to an affiliate of Icahn Enterprises for US$340 million.
The deal includes Beck/Arnley Worldparts, but excludes the Quebec-based companys paint distribution business, FinishMaster, and its Canadian automotive parts operations.
The sale includes 39 distribution centres and 240 corporate stores that employ nearly 3,000 people.
Today’s announcement reflects our strong commitment to our automotive parts and paint distribution activities in Canada and our automotive paint distribution activities in the US through FinishMaster, and allows us to further accelerate growth, both organically and through acquisitions as both markets present various opportunities for future development, said Uni-selec Chief Operating Officer, Henry Buckley.
Uni-selec will use the proceeds to repay debt while it focuses on its U.S. paint and Canadian operations, wher it is a market leader.
The deal, which has been approved by Uni-Selects board of directors, is expected to close in the first half of the year, subject to regulatory approvals.
After a thorough review of our operations, we have concluded that the salewill allow us to focus on our current strengths and core businesses, CEO Richard Roy said Monday.
Uni-selec expects to incur an after-tax loss of US$80 million to US$100 million in the first quarter of 2015, reflecting transaction-related costs, restructuring charges and goodwill writedowns among other balance sheet costs.
The company reports its fourth-quarter results next week and the consensus of analysts as compiled by Thomson Reuters is for an adjusted profit of US$11.5 million or 57 cents per share (US$9.9 million net) on US$423.6 million of sales. That compares with adjusted earnings of US$13.2 million or 62 cents per share (US$10.2 million net) on US$425.58 million in sales in the final quarter of 2013.
Icahn Enterprises is a diversified holding company that controls companies with more than US$20 billion of assets in the investment, automotive, energy, gaming, rail car, food packaging, metals, real estate and home fashion sectors.
With the advent of the bull market over the last five years, it has become increasingly difficult to find companies that we believe to be undervalued and with growth potential. That is why we were happy when we learned that the United States segment of Uni-selec was available, said chairman Carl Icahn.
The acquired business will be operated independently from Federal-Mogul Holding, the automotive products subsidiary of Icahn Enterprises.
