CSK Auto Corporation to Acquire Big Wheel/Rossi Auto Parts Stores
18 May 1999
CSK Auto Corporation to Acquire Big Wheel/Rossi Auto Parts Stores- Acquisition to Provide CSK with Growth Platform in Northern Plains/Midwest - PHOENIX, May 18 -- CSK Auto Corporation announced today that its wholly-owned subsidiary, CSK Auto, Inc., the largest retailer of automotive parts and accessories in the Western United States and one of the largest such retailers in the country, has entered into a definitive agreement to acquire substantially all of the assets of Apsco Products Company dba Big Wheel/Rossi, the leading retailer of auto parts in the Northern Plain states. Big Wheel/Rossi operates 86 stores in Minnesota, North Dakota and Wisconsin. CSK Auto believes these stores will produce sales of $85 million to $90 million during calendar 1999. CSK Auto, Inc. will pay approximately $60 million in cash for the assets, and will fund the purchase through its senior credit facility, which will be increased. CSK will also assume certain indebtedness of Big Wheel/Rossi of approximately $5 million. CSK Auto, Inc. is a specialty retailer in the automotive aftermarket operating approximately 825 stores under the trade names of Checker, Schuck's and Kragen in 13 Western states. The acquisition of the 86 Big Wheel/Rossi stores gives CSK an immediate presence of scale in a strategically important market adjacent to its current operations. CSK intends to utilize Big Wheel/Rossi's existing distribution center in the Minneapolis area which CSK believes is capable of supporting significantly more stores than the existing 86 Big Wheel/Rossi stores. CSK plans to introduce to the newly acquired stores its commercial sales program in which CSK offers a broad product selection to professional installers, repair shops and fleet operators. Big Wheel/Rossi currently has minimal commercial sales while commercial sales represent approximately 18% of CSK's sales. "This acquisition of the Big Wheel/Rossi business will provide CSK with an excellent platform for growth in the Northern Plains/Midwest market," said Maynard Jenkins, Chairman and Chief Executive Officer of CSK Auto Corporation. "This transaction is consistent with our strategic plan to build our business and improve our profitability through accretive acquisitions and significant new store openings. Big Wheel/Rossi, the leading auto parts retailer in the Northern Plains states with quality personnel, name brand product, and an average store size in excess of 6,500 square feet, will be a great addition to the CSK family. We will leverage CSK's expertise in commercial sales, distribution and information technology, and take advantage of synergistic opportunities." The closing, which is subject to the satisfaction of certain conditions, is expected to occur in June. Following the completion of the transaction, CSK Auto will employ approximately 12,000 people in more than 900 stores, three major distribution centers and several regional distribution centers. Certain statements contained in this release are forward-looking statements. They discuss, among other things, expected growth, future store development strategy, business strategies, future revenues and future performance. The forward-looking statements are subject to risks, uncertainties and assumptions, including, but not limited to, competitive pressures, demand for the Company's products, the state of the economy, inflation, consumer debt levels and weather. Actual results may differ materially from the anticipated results described in these forward-looking statements.