United States. Advance Auto Parts, Inc. The U.S. announced the sale of its subsidiary Worldpac, Inc., a wholesale distributor of automotive parts, to Carlyle, a global investment firm, for $1.5 billion in cash.
The transaction, which will mark a significant shift in Advance's strategy, is expected to be completed before the end of 2024.
Shane O'Kelly, president and chief executive officer of Advance Auto Parts, said the sale will allow the company to focus on its core mixed box business. "With this transaction, our team will be able to focus on decisive actions to revitalize our core operations. The funds raised will provide greater financial flexibility to strengthen the balance sheet and invest in future growth," said O'Kelly. He also thanked Worldpac's more than 5,000 employees for their dedication over the past decade.
Wes Bieligk and Katherine Barasch, Carlyle executives, expressed their enthusiasm for the acquisition, highlighting the attractiveness of the market in which Worldpac operates. "Our experience in industrial divestitures uniquely positions us to support Worldpac as an independent company," they said. Carlyle has a strong track record in these types of operations, having invested $13 billion in industrial divestitures over the past two decades.
Financial Impact and Transaction Details
Worldpac generated approximately $2.1 billion in revenue and $100 million in EBITDA over the last year. Advance Auto Parts is expected to receive about $1.2 billion in net income after taxes and transaction-related costs.
Centerview Partners and Hogan Lovells US, LLP, advised Advance on this transaction, while Carlyle was advised by BofA Securities, BMO Capital Markets and Latham & Watkins.
