O'Reilly Automotive and Hi/Lo Automotive Announce Merger Agreement
23 December 1997
O'Reilly Automotive and Hi/Lo Automotive Announce Merger Agreement
SPRINGFIELD, Mo. and HOUSTON, Dec. 23 -- O'Reilly Automotive,
Inc. ("O'Reilly") and Hi-Lo Automotive, Inc.
("Hi/LO") today jointly announced that the two companies have signed a
definitive merger agreement for the acquisition of Hi/LO by O'Reilly.
Under the terms of the agreement, a subsidiary of O'Reilly will commence a
tender offer on December 24, 1997, to acquire all of the outstanding shares of
Hi/LO for $4.35 per share in cash. Following the completion of the tender
offer, O'Reilly will consummate a second step merger in which remaining Hi/LO
stockholders will also receive $4.35 per share in cash.
The acquisition will add 188 new stores in Texas, Louisiana and
California, along with a 375,000 square foot distribution center in Houston,
Texas, to O'Reilly's current 259 retail stores and three distribution centers
in the Midwest. The acquisition will make O'Reilly one of the top ten auto
parts chains in the country. "Like O'Reilly, Hi/LO has been successful in
pursuing a dual market strategy, and this fact, combined with their
complementary geographic location, offers our company and our team members
many excellent opportunities," stated David O'Reilly, President and Chief
Executive Officer of O'Reilly.
Mike Young, Chief Executive Officer of Hi/LO, stated that "We are very
pleased to be combining Hi/LO with the O'Reilly organization because their
operating philosophy is so similar to ours. We believe the transaction is in
the best interests of the Hi/LO stockholders, our associates and our
customers."
Donaldson, Lufkin & Jenrette Securities Corporation is acting as advisor
to O'Reilly, and will act as Dealer Manager for the tender offer. Bank
financing for the transaction will be provided by NationsBank. SBC Warburg
Dillon Read, Inc. served as financial advisor to Hi/LO and has provided a
fairness opinion in connection with the transaction.
The tender offer and merger are subject to customary conditions, including
the tender of a majority of Hi/LO's shares and termination of the waiting
period under U.S. antitrust laws. The tender offer will be made pursuant to
definitive documents to be filed with the Securities and Exchange Commission.
The merger agreement was entered into by O'Reilly and Hi/LO after Hi/LO
terminated its previously announced merger with Discount Auto Parts, Inc. and
paid the required termination fee of $4 million.
Hi/LO sells automotive aftermarket parts, products and accessories for
domestic and imported cars, vans and light trucks to "Do-It-Yourself"
customers and commercial auto repair outlets.
O'Reilly is a leading specialty retailer and supplier of automotive
aftermarket parts, tools, supplies, equipment and accessories to both do-it-
yourself customers and professional mechanics and service technicians.
Founded in 1957 by the O'Reilly family, the company currently operates stores
within the states of Missouri, Arkansas, Kansas, Oklahoma, Nebraska and Iowa.
Statements contained in this press release which are not historical facts
are forward-looking statements. Such forward-looking statements are necessary
estimates reflecting the best judgment of the party making such statements
based upon current information and involve a number of risks and
uncertainties. Forward-looking statements contained in this press release or
in other public statements of the parties should be considered in light of
those factors. There can be no assurance that such factors or other factors
will not affect the accuracy of such forward-looking statements.
SOURCE Hi-Lo Automotive, Inc.
