From aftermarketNews Staff and Wire Reports
It has been reported that Japan’s Autobacs Seven Co. Ltd. has reached an agreement to buy Strauss Discount Auto out of bankruptcy for a price of up to $55 million.
The agreement, which would include the purchase of more than 90 Strauss Discount Auto stores located around New York City and Philadelphia, must be approved by the court overseeing Strauss’ Chapter 11 proceedings. Strauss filed for bankruptcy on August 10 after defaulting on a $22 million line of credit, and its lenders cut off its access to cash.
A voting deadline on the agreement has been set for April 23 and a confirmation hearing is scheduled for April 25.
Autobacs has proposed to pay up to $45 million in cash for Strauss’ assets and plans to put an additional $10 million into the business following Strauss’ exit from bankruptcy protection.
Chief Executive Glenn Langberg and President Joseph Catelano will remain as senior management executives at the reorganized company, which will be renamed Autobacs Strauss Inc.
“We’re delighted about the proposed acquisition,” Catelano said. “This is a stepping-stone for future brand recognition.
“We’re excited to begin to rejuvenate Strauss with tens of millions of dollars,” Catelano continued. “We’ll have the capital to renovate, upgrade, introduce new categories and change the whole exposure customers will experience, both cosmetically and from a service standpoint.”
Strauss has reserved $19 million for unsecured creditors, who have filed about $43 million in claims against it.
Under the plan, the creditors would be paid over the next three years in five installments. The plan also calls for shareholders to retain their interests in the company. GDJ Retail, LLC, owns 87 percent of Strauss and Monro Muffler Brake, Inc. has a 13 percent stake.
Monro Muffler Brake had planned to purchase Strauss but backed out of the deal after Strauss’ bankruptcy.
Founded in 1919, Strauss is a regional retailer of import and domestic auto parts and services with 91 stores located throughout metropolitan New York, New Jersey, Philadelphia, and Bethlehem, PA. Strauss offers customers a wide selection of auto parts as well as complete automotive service and tire installation centers.
Autobacs is an independent retailer of auto parts and services in Japan with more than 538 locations. Established in 1948 as a wholesaler and retailer of automotive parts, Autobacs pioneered automotive aftermarket specialty retailing in Japan with the first store in 1974 in Osaka and its retail network has since grown to become Japan’s largest nationwide chain. Autobacs has also expanded internationally, having established 21 stores in Taiwan, Singapore, Thailand, France, the U.S. and China.
