Genuine Parts Company is to sell its wholly-owned subsidiary EIS, the Electrical Specialties Group of Motion Industries, to Audax Private Equity (Audax).
GPC intends to use the net cash proceeds from the transaction in accordance with its disciplined capital allocation strategy. The use of these funds may include potential investments for both organic and acquisitive growth, reinvestments in the business, share repurchases and the repayment of debt. The transaction is expected to close by the end of September 2019, subject to the satisfaction of customary closing conditions.
EIS is a well-established and growing North American fabricator, converter and distributor of electrical process materials, wire, cable and assemblies serving end-user segments in electrical power and related markets. It provides more than 110,000 SKUs from 38 branches and four fabrication facilities to more than 20,000 customers across North America.
Paul Donahue, Chairman and Chief Executive Officer of GPC, says: “The sale of EIS represents the further streamlining of our operations and another step forward in our strategy to optimise our portfolio and strengthen our focus on sustainable, value-driving initiatives. Consistent with our ongoing acquisition strategy, we continue to execute on our capital allocation priorities to prudently expand our global footprint and capitalise on the growth prospects for our core businesses, while maintaining a strong balance sheet.
“I want to thank the entire EIS team, whose hard work and dedication has made this transaction possible. Given Audax’s experience in leading industrial companies to their next stages of growth, I am confident that it is the right partner for EIS, and we look forward to working with Audax to ensure a smooth, successful transition for our employees, customers and supply base.”
Don Bramley, Managing Director of Audax, adds: “We believe EIS is a quality organisation with an experienced management team, loyal customer base, strong partnerships and a proven M&A platform that will complement our portfolio of industry leading companies. Audax will provide the expertise and resources to support the EIS leadership team as it continues to broaden its customer base, expand its offerings to adjacent markets and enhance service and support programs for the benefit of all EIS stakeholders.”
JP Morgan is acting as financial advisor and Troutman Sanders LLP is acting as legal counsel to GPC. Kirkland & Ellis LLP is serving as legal counsel to Audax.
