A handful of firms are advising on a $2.04 billion all-cash deal that will see Advance Auto Parts acquire privately held rival General Parts International in a takeover bid that will create North America’s largest auto parts retailer.
Roanoke, Virginia–based Advance Auto currently trails O’Reilly Automotive and market leader AutoZone in the race to become the country’s top provider of new and repurposed auto parts. Reuters reports that the purchase of General Parts allows Advance Auto to enter the repair business by picking up the Carquest auto supply chain and expand into new product lines.
Kirkland & Ellis corporate partner Daniel Wolf—who joined the firm in a high-profile lateral move four years ago from Skadden, Arps, Slate, Meagher & Flom—and corporate partners Michael Brueck and Dvir Oren and associate Benjamin Ritzo are leading a team advising Advance Auto on the deal, which is the firm’s first for its client, although Kirkland is well-versed in auto industry work.
Last year Kirkland represented auto repair chain Midas on its $310 million acquisition of tire distributor TBC from Japan’s Sumitomo. The firm also advised auto parts supplier Visteon on its exit from bankruptcy proceedings three years ago this month.
Stikeman Elliott is acting as Canadian counsel to Advance Auto through antitrust and foreign investment head Paul Collins—who rejoined the firm last year after a two-year stint with Canada’s Competition Bureau—M&A partner Brian Pukier, labor and employment partner Helene Bussieres, and associates Michael Kilby, Kevin Smyth, and Diane Theophilopoulos.
Michael Aiello, chairman of the corporate department at Weil, Gotshal & Manges, and associate Lauren Lipson are advising J.P. Morgan Securities as financial adviser to Advance Auto on its proposed purchase of General Parts.
Sarah Powell has served as general counsel and corporate secretary for Advance Auto since 2006, while retired O’Melveny & Myers partner Gilbert Ray has been an independent member of the company’s board of directors since late 2002.
For its part, Raleigh-based General Parts has turned to North Carolina’s Manning Fulton & Skinner and Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan for outside counsel on its proposed sale to Advance Auto. The firms are two of the largest in Raleigh, and Smith Anderson chairman John Jernigan told the Triangle Business Journal that his firm had dedicated a “large team” to advise General Parts on “one of the largest private company transactions in the history of North Carolina.”
Robert Wicker, a former general counsel of Burlington Industries until its 2003 sale to distressed asset king Wilbur Ross, serves as general counsel of General Parts. Wicker is the younger brother of former North Carolina lieutenant governor and current Nelson Mullins Riley & Scarborough partner Dennis Wicker. (Both were previously partners at Helms Mulliss & Wicker, which in 2008 merged with McGuireWoods.)
The Associated Press notes that the sale of General Parts to Advance Auto comes at a time when low interest rates and better credit availability have fueled a rebound in U.S. auto sales. Advance Auto hopes to see $160 million in annual savings from the deal, which is expected to close later this year or early 2014, pending regulatory approvals.
Private equity firms KKR and Leonard Green & Partners were reportedly interested in General Parts after it put itself up for auction this summer, and The New York Times’ DealBook reported late last year that Advance Auto had also attracted the interest of private equity firms looking for the next big leveraged buyout.
Last year another private equity firm, The Gores Group, made a $1 billion buyout bid for The Pep Boys auto parts repair business. But the proposed takeover subsequently collapsed amid concerns about the target’s shaky financials, although Manny, Moe, and Jack did snag a $50 million breakup fee.