Rankin Automotive Group Triples Revenues
1 March 1999
Rankin Automotive Group Triples Revenues Through Asset Purchase of Three Businesses
ALEXANDRIA, La., March 1 -- Rankin Automotive Group, Inc.
("Company") today announced the signing of three definitive
Asset Purchase Agreements (Agreement(s)) with U.S. Parts Corporation
(US Parts), a high volume parts distributor to automotive installers and
Allied Distributing Company (Allied), a large distributor to independent auto
parts stores, both headquartered in Houston, Texas and Automotive and
Industrial Supply, Inc. (A&I), a leading distributor to automotive installers,
headquartered in Shreveport, La.
Under the terms of the Agreements, which have been unanimously approved by
the Board of Directors of the Company, the Company is purchasing substantially
all of the operating assets, including trade names, and assuming substantially
all of the operating liabilities of the businesses to be acquired. The
aggregate purchase price for the net assets (including goodwill) of these
three businesses will include approximately $17.0 million, in cash, Company
Common Stock and the assumption of certain notes payable and other
liabilities. The Agreements are subject to closing on a $45.0 million
committed financing and certain other conditions. Closing is expected to
occur by March 31.
Pro forma annual sales as a result of this business combination are in
excess of $130.0 million. As a result of the acquisitions the Company will
operate 68 stores, 6 warehouses and serve approximately 310 independent auto
parts stores in the retail and commercial segments of the automotive
aftermarket in Texas, Louisiana, Mississippi, Arkansas and Alabama. The
Company expects the combined business to have a positive impact on earnings
and earnings per share during fiscal 2000, which began February 26, 1999. The
Company will be served by approximately 1100 employees after closing these
transactions.
Senior management of all four companies is expected to have active
management roles with the Company. Randall Rankin will continue to serve as
Chairman and Chief Executive Officer of the Company. Ali Attayi, Founder and
Chief Executive Officer of US Parts, will serve as President and Chief
Operating Officer. The Company has also retained the services of Gary D.
Walther to serve as interim Chief Financial Officer. Randall Rankin stated,
"This transaction is the result of the shared vision by senior management of
the four companies; that a larger entity, with common ownership and employees
experienced in the industry provide the strongest platform to provide superior
customer service and growth opportunities for our employees and Stockholders."
Ali Attayi added, "This is a combination of four outstanding businesses that
are a natural geographic fit. Allied's Epstein/Silverman families are proven
leaders, experienced in distribution and purchasing, A&I's Cannon family
provides outstanding operating and sales expertise, US Parts is a market
leader in sales and technology, and Rankin is a leading consolidator in the
automotive aftermarket. Future growth will come from improved operations, new
store openings and strategic acquisitions within our geographic region."
Some of the information in this press release constitutes forward-looking
information based on current information and expectations of the Company that
involve a number of uncertainties. Among the factors that could materially
affect the validity of the forward-looking information are the following:
changes in current industry trends, changes in competitive factors, changes in
the economic environment in which the Company has its operations, and other
factors which would generally affect the operations of the Company.