Global private investment firm Carlyle Group is to acquire Worldpac, the wholesale distribution business of North American automotive aftermarket parts provider, Advance Auto Parts, in an all-cash $1.5bn deal, which is expected to complete by the end of the year.
The sale of Worldpac is part of Advance Auto Parts’ strategy to simplify its enterprise structure and focus more sharply on its core “blended box” business model. According to Shane O’Kelly, President and CEO of Advance Auto Parts, the proceeds from the sale will primarily be used to strengthen the company’s balance sheet and to reinvest in its remaining operations.
Carlyle plans to leverage its experience in executing complex carve-outs to support Worldpac as it transitions to operating as an independent company. Carlyle has invested around $13bn in industrial carve-outs over the past 20 years, with past investments including companies such as Axalta, Nouryon, Atotech, Signode and Allison Transmission.
Over the past twelve months, Worldpac has generated approximately $2.1bn in revenue and $100m in EBITDA. After taxes and transaction fees, Advance Auto Parts expects to net about $1.2bn from the sale.
Advance Auto Parts was advised by Centerview Partners and Hogan Lovells US. Carlyle was advised by BofA Securities, BMO Capital Markets and Latham & Watkins.
