Genuine Parts Co. announced it has entered into a definitive agreement under which its wholly-owned subsidiary, Motion Industries, Inc. (Motion) will acquire Kaman Distribution Group (KDG) from private investment firm Littlejohn & Co., LLC. The acquisition is valued at a total purchase price of approximately $1.3 billion in cash. The transaction is expected to close in the first quarter of 2022, subject to the satisfaction of customary closing conditions. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 has expired.
“We are excited to announce this strategic investment in our Industrial business,” said Paul Donahue, chairman and CEO of GPC. “Motion’s highly synergistic acquisition of KDG significantly enhances our scale and further strengthens our market-leading position. In addition, this combination creates opportunities for accelerated long-term growth, profitability and cash flow. Our Motion team, led by Randy Breaux, is eager to bring together the world-class talent and industrial expertise of these two organizations to build an even stronger business. We look forward to extending our leadership position and creating significant shareholder value together as a premier leader in industrial solutions.”
Established in 1971, KDG is a power transmission, automation and fluid power industrial distributor and solutions provider with operations throughout the U.S., providing electro-mechanical products, bearings, power transmission, motion control and electrical and fluid power components to MRO and OEM customers. Headquartered in Bloomfield, CT, KDG’s 1,700 employees serve more than 50,000 customers.
KDG is expected to generate approximately $1.1 billion of revenue in 2022. Additionally, GPC expects the acquisition to be accretive to its adjusted earnings in the first year after closing.
Other transaction highlights include:
- $50M+ annual run-rate synergies, expected to be achieved over three years
- Anticipated leverage at closing of ~2x, within range of GPC targeted levels
- Funded at closing via existing revolver and accounts receivable sales agreement
- Expected to maintain liquidity in excess of $2 billion
Ben Mondics, president and CEO of KDG, said, “Motion is a nationally recognized brand and a market leader in industrial distribution. We are very pleased to combine our two great businesses and leverage our collective resources and expertise to accelerate profitable growth. We appreciate the exceptional efforts of our employees who make our company so great, and we are confident Motion is the natural partner for continued long-term success.”
Advisers
Greenhill & Co., LLC is acting as financial adviser to GPC and King & Spalding is acting as legal counsel. Baird is serving as financial adviser to KDG and Gibson, Dunn & Crutcher LLP is serving as legal counsel.
