Environmental Investment Fund Takes Equity Stake in Auto Parts Recycler
28 July 1999
Major Environmental Investment Fund Takes Significant Equity Stake in Auto Parts Recycler
AmeraPARTS International Offers Technology-Driven Recycling Solutions for The
Over 200 Million Vehicles Traveling America's Highways Annually
ATLANTA, July 27 -- AmeraPARTS International, L.L.C.
(formerly AutoSTAR USA, L.L.C.), the premier wholesale processor and
distributor of top-quality recycled and remanufactured automotive parts, has
announced new equity financing from Churchill Capital, Inc., a private
investment fund management company. This transaction immediately makes
available more than $30 million for business expansion through Churchill
Environmental & Industrial Equity Partners (jointly based in Minneapolis and
New York), as well as through credit facilities provided by major U.S.
financial institutions.
AmeraPARTS presently operates two state-of-the-art, indoor auto parts
recycling industrial complexes, a high-volume automatic transmission
remanufacturing plant and an automotive plastics reconditioning center, all
located in high-growth areas of Florida and Georgia. These facilities are
comprised of more than 375,000 square feet of manufacturing and distribution
plants located on approximately 30 acres of land. By the year 2000, The
Company will expand to 750,000 square feet of buildings located on
approximately 100 acres servicing most of the major Southeastern U.S. cities.
"This new investment partner brings to us the financial resources to
rapidly roll-out our growth plans for the foreseeable future," said James R.
Johnson, CEO of AmeraPARTS. "We plan to establish parts processing and
warehousing facilities in more than 50 major markets across the United
States." Johnson expects AmeraPARTS to eventually generate revenues in excess
of $800 million in the U.S. and international markets.
"There are more than 200 million vehicles currently on U.S. highways, with
a net increase of more than three million additional vehicles entering our
roadways each year," added Johnson. "AmeraPARTS is providing, in an
environmentally friendly way, a substantial number of low-cost automotive
replacement parts. This strategy creates a partnership between AmeraPARTS,
the insurance industry and the professional repair shops to improve our
environment and to lower the cost of reliable repairs for consumers."
Partnerships with insurers
Working with the southeastern regional offices of insurers such as
Progressive, GEICO, State Farm and Allstate, AmeraPARTS has quickly become a
leader in the recycled OEM (Original Equipment Manufacturer) automotive parts
industry. AmeraPARTS is pioneering advancements in reliable delivery time,
quality-assurance in inventory processing and environmentally sound cleaning
methods, technology-driven distribution systems and human resource strategies
that will reshape the recycling industry.
"We are bringing the OEM recycled parts business into the 21st Century,"
Johnson said. "We have combined the harvesting of reusable OEM automotive
parts with the remanufacturing of certain driveline components in order to
increase their service life, all under one cataloging, distribution and
overhead system. The synergistic relationship of these two components of the
replacement automotive parts industry provides us with competitive advantages
and the ability to achieve accountability, quality control and to provide a
wide base of services to the replacement parts industry."
The recycled parts business has been hampered in the past by unreliable
delivery, uncertain quality and the lack of a cohesive distribution system.
AmeraPARTS provides these recycled and remanufactured parts in much the same
manner as brand new OEM parts are delivered within the industry. These
recycled and remanufactured parts save a significant amount of repair costs
for both the insurance companies and the consumers who ultimately end up
paying the bill. Additionally, AmeraPARTS has engaged the consulting staff of
PricewaterhouseCoopers to advance its technological capability through
computerized automation and quality-monitoring which will evolve into an
ISO9002 quality certification during the year 2000.
AmeraPARTS disassembles OEM parts from vehicles sourced from the insurance
industry's "total losses," inspects each part for additional service life and
stores the inventory in climate-controlled facilities ready for immediate
shipment. AmeraPARTS also remanufactures increasingly complex automatic
transmissions in large-scale operations that have a production capacity of
more than 60,000 units per year.
Focus on the Environment
What further separates AmeraPARTS from traditional salvage yards
throughout the United States is its focus on the environment. When AmeraPARTS
first takes over an existing industrial facility, an environmental engineering
firm performs an audit and the property is certified "clean" prior to
commencing operations. Thereafter, environmental audits are performed
annually to assure environmentally sound operations. All vehicles received at
AmeraPARTS are inventoried, disassembled and cleaned in state-of-the-art auto
recycling facilities using closed-loop water recycling systems, which reduce
water use and eliminate contamination. Substantially every part of each
vehicle that enters the Company's production facilities is either prepared for
reuse in the marketplace or sold to "mini-mills" for their steel and aluminum
content, saving valuable landfill space. Currently, the Company is engineered
to process approximately 8,000 vehicles per year and is expected to reach
20,000 units annually by the year 2000. This operation eliminates the use of
an estimated 250 acres annually in outdoor storage and the associated
environmental risks.
"There is no doubt that the recycling of OEM parts will be an important
factor in the future of the replacement automotive parts industry," Johnson
added. "AmeraPARTS reconditions and gives new life to OEM plastic bumper
covers that previously were disposed into landfills. Each recycled bumper
cover, which has been given this new life, saves approximately one cubic foot
of non-biodegradable plastics from ending up in our nations' landfills. Our
bumper reconditioning operations alone will save approximately 60,000 cubic
feet of plastics from being dumped into landfills each year."
About AmeraPARTS International, L.L.C.
Founded in 1997, AmeraPARTS (formerly AutoSTAR USA, L.L.C.) is a premier
wholesale processor and distributor of top-quality recycled automotive
mechanical and body parts, reconditioned components (such as plastic bumper
covers) and a full-line of remanufactured transmissions. AmeraPARTS operates
two state-of-the-art, indoor auto parts recycling industrial complexes, a
high-volume automatic transmissions remanufacturing plant, and a plastic
components reconditioning center. These facilities are in Lakeland, Florida,
and Atlanta, Georgia. The Company has administrative offices in Jacksonville,
Florida, and is managed by a team of executives and directors who have
extensive backgrounds in the automotive, financial management, industrial
waste and Big Five accounting industries, and is audited annually by
PricewaterhouseCoopers. (http://www.ameraparts.com )
About Churchill Capital, Inc.
Churchill Capital, Inc. is a private investment fund management company
that by the end of 1999 will have raised in excess of $1 billion in capital
for three complementary investment strategies, including the environmental
industry. (http://www.churchillnet.com )
About Other Major Companies in the Recycled Parts Industry
Recent entries into the recycled parts marketplace include a business unit
within Ford Motor Company as well as a Chicago-based group operating under the
name of LKQ Corporation.