R&B Completes First Stage of Champ Service Line Acquisition
3 September 1998
R&B Completes First Stage of Champ Service Line Acquisition
COLMAR, Pa., Sept. 3 -- R&B, Inc. today
announced that it has completed the first and most significant phase of its
acquisition of the Service Line Division ("Champ") of Standard Motor Products,
Inc. ("Standard") . Champ is being acquired in three stages for
net asset value less a reserve for certain costs and contingencies in an
all-cash transaction which will be financed using the Company's existing
credit facilities and cash from operations. The final acquisition price,
estimated not to exceed $5 million, will not be determined until after the
final closing in November.
The final acquisition agreement for the Service Line Division included the
Champ Service Line, Pik-A-Nut, and portions of Everco which was acquired by
Standard in connection with its asset swap earlier in the year with Cooper
Automotive. The portions of Everco acquired include brass fasteners and brake
lines for automobiles. R&B also agreed to acquire the inventory of the APS
Service Line on a consignment basis. The APS Service Line is a private label
program for APS Holding Corp. (the Big A Auto stores). APS Holding Corp. is
currently in bankruptcy. The acquisition is scheduled to close in three
stages, as inventory is transferred, with Champ having closed effective
September 1, Pik-A-Nut to close October 1, and Everco to close November 1.
Because of the transfer of inventory, shipments from each division will begin
approximately four weeks following the division's scheduled close date.
Although originally Champ's trailing twelve month revenues had been
estimated at $40 million, with the bankruptcy of APS, on a restructured basis,
R&B expects the acquired divisions to generate approximately $17 million to
$20 million on an annualized basis.
Commenting on the closing, Richard Berman, President of R&B, stated, "We
are quite pleased with the terms of the final agreement, including the
addition of Everco. We have staged the closing to ensure that R&B's existing
customers will not experience a disruption resulting from this large transfer
of inventory. We have also notified Champ's customers that during each
transition period, they will receive no shipments of the products being
transferred. Once each transition is complete, we will quickly bring each of
those lines up to the same high-standards for service and on-time delivery
that our existing customer base has come to expect."
Mr. Berman concluded, "With this acquisition, service line products will
represent one of our five platforms for growth, along with hard-to-find parts
and fasteners, new car dealers and salvage yards, international opportunities,
and non-automotive markets. We expect this acquisition to be neutral to
earnings in the current year and to be accretive in 1999. In addition to
contributing to our earnings growth, this acquisition will enable us to
enhance the value we bring to new and existing customers and further our goal
of being the leading supplier of hard-to-find parts, fasteners, and related
service parts."
R&B, Inc. is a leading supplier of "hard-to-find" parts and fasteners for
the automotive aftermarket. R&B's parts are marketed under more than fifty
proprietary brand names, through its Motormite and Dorman divisions, as well
as under the private labels of automobile manufacturers, parts manufacturers,
and national warehouse distributors.
Forward looking statements in this release are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such forward looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from those projected.
Readers are cautioned not to place undue reliance on these forward looking
statements which speak only as of the date hereof. Factors that cause actual
results to differ materially include, but are not limited to, those factors
discussed in the Company's Annual Report on Form 10-K under "Business -
Investment Considerations."
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