HDA Parts and Quality Distribution Service Partners Announce Plans to Merge
14 June 1999
HDA Parts System, Inc. and Quality Distribution Service Partners, Inc. Announce Plans to MergeDEERFIELD, Ill., and ITASCA, Ill., June 11 -- Two of the nation's leading aftermarket distributors of heavy-duty truck parts today announced plans to merge their operations. HDA Parts System, Inc. ("HDAPS") headquarted in Deerfield, Ill., and Quality Distribution Service Partners, Inc. ("QDSP") of Itasca, Ill., have signed a letter of intent to form the largest independent distributor in the heavy-duty truck parts aftermarket. The merged company will be named FleetPride. FleetPride will have revenues exceeding $500 million with more than 150 locations nationwide. Each of the company's locations will carry a full line of nationally recognized brand name parts. In addition, FleetPride will offer an array of in-house re-manufactured products such as brake shoes, transmissions, rear axles and driveline components. Truck repair services also are offered at many locations. "HDAPS and QDSP are an excellent strategic fit," said John Greisch, president and chief executive officer of HDAPS, who will become president, chief executive officer and a director of FleetPride when the merger is completed. "With the merger of HDAPS and QDSP we are able to accelerate the achievement of our mission to create the first nationally integrated distributor in the heavy-duty aftermarket. This means our customers can look forward to an efficient, customer-oriented organization with the financial resources to invest in innovative product, service and distribution technologies for the future." Over the past year HDAPS and QDSP have acquired a number of the strongest local and regional distributors in the industry, some of which have been in the business for more than 50 years. "The combination of HDAPS and QDSP will result in the creation of one of the leading independent distributors in the heavy-duty aftermarket," said Greisch. "The capabilities of the merged companies will provide our customers extensive national distribution coverage that will be unparalleled in the industry. The merger also will provide the opportunity for further cost reductions, new customer alliances, and additional marketing and purchasing efficiencies." Bill Wade, president and chief executive officer of QDSP, will be chairman and a director of FleetPride until January 1, 2000 at which time Greisch will assume the position of chairman. Wade will continue to be a director of FleetPride following January 1, 2000. Wade said, "The local market position of the two companies will be significantly strengthened by this combination. The enhanced product offering and broader geographic coverage that will be available to our customers as a result of this merger will allow all of our operations to provide greater service to our expanding customer base." HDAPS and QDSP were both formed in 1998 by two Los Angeles based private equity firms, Brentwood Associates and Aurora Capital Group, respectively. Brentwood and Aurora, together with certain of their affiliated funds, will be equal shareholders in FleetPride. The combination will be structured as a stock merger with the shareholders of QDSP receiving HDAPS stock with a value of approximately $68 million. In addition, at the time of the merger HDAPS is expected to receive proceeds in the amount of approximately $40 million in cash from the issuance of new equity to certain existing shareholders of HDAPS and QDSP. The merger is subject to customary regulatory approval and is expected to be finalized by the end of September. Comments in this release contain forward-looking statements, which are based on management's good faith expectations and beliefs concerning future developments. Actual results may materially differ from these expectations as a result of many factors.