Standard Motor Products Announces the Signing of A Letter of Intent To Sell The Service Line Division
20 October 1997
Standard Motor Products Announces the Signing of A Letter of Intent To Sell The Service Line Division
NEW YORK, Oct. 20 -- Standard Motor Products, Inc.
, automotive replacement parts manufacturer and distributor,
announces that it has entered into a Letter of Intent to sell its Service Line
Business to R&B, Inc. of Colmar, PA. R&B, Inc. is a leading
supplier of "hard-to-find" service parts and fasteners for the automotive
aftermarket. The sale will be of select assets of the Champ and APS service
lines and Pik-A-Nut fastener line, for approximately tangible net book value
less reserves for certain costs and contingencies.
Although the final consideration to be paid is not yet certain, Standard
Motor Products will be incurring a loss on the sale of the business. The loss
on sale will be reflected in the Company's fourth quarter results once the
final terms of a Purchase Agreement are known. Proceeds from the sale will be
used to pay down debt.
Closing on the sale will not occur until Mid-1998 due to transition
issues. Standard and R&B will work closely together during this phase to make
the transition effective and seamless for the customers. The closing is
contingent on satisfactory completion of customary due diligence, entering
into a definitive Purchase Agreement and approval of the Board of Directors of
Standard Motor Products and R&B, Inc., among other conditions.
Mr. Larry Sills, President said, "the sale of the Service Line Division to
R&B, Inc. is a win-win transaction. It expands R&B's product offerings and
improves their capabilities to serve their customers. The sale will permit
Standard to redeploy assets into projects that generate higher returns and
help us further enhance shareholder value. It reinforces our strategy of
focusing our resources and attention on our two primary product groups --
engine management and temperature controls."
SOURCE Standard Motor Products, Inc.
