CARSON, Calif. — U.S. Auto Parts announced that it has signed a definitive Stock Purchase Agreement to acquire Whitney Automotive Group for the purchase price of $27.5 million and assumption of approximately $11 million in trade-related and other payables. Whitney Automotive Group is expected to have $110 million to $120 million in revenues under U.S. Auto Parts ownership in 2010.
The Whitney Automotive Group, a 95-year-old company best known for the JC Whitney brand, is part of a group of established brands that distribute aftermarket automotive parts primarily focused on the "Do It Yourself" customer in the automotive accessories aftermarket. Its brand portfolio includes Stylintrucks.com, Carparts.com and Allbikesupershop.com, which, along with JCWhitney.com, generate approximately 3mm monthly unique visitors.
"With this acquisition, U.S. Auto Parts adds one of the most recognizable consumer facing brands in the online auto parts market, which should increase our customer reach, provide product line expansion and enhance our distribution footprint," said U.S. Auto Parts CEO Shane Evangelist. "And, most importantly, we will be adding very talented team members who can help U.S. Auto Parts take advantage of the favorable market conditions for the online auto parts market."
In addition to a leading presence in the accessories market, this acquisition also provides U.S. Auto Parts with product line expansion into ATVs, RVs and motorcycles, as well as deep product knowledge into niche segments like Jeep, VW and truck enthusiasts.
Whitney Automotive Group owns a $10 million state-of-the-art distribution center located in Illinois that holds approximately $15 million of owned inventory and was custom-built for B2C distribution of auto parts. The acquisition would allow U.S. Auto Parts to complete a three-distribution center network and thus should increase its distribution footprint and allow for 95 percent of customers in the U.S. to receive parts within two days of purchase using ground or common carriage.
"This acquisition clearly demonstrates U.S. Auto Parts’ commitment to the aftermarket accessories category and we look forward to working with our new suppliers," said Evangelist.
"We believe that the combination of Whitney’s established brands and focus on the customer experience, coupled with U.S. Auto Parts’ capacity to compete online, creates a huge opportunity for growth," said Whitney CEO Tom West.
Closing of the acquisition is subject to certain conditions specified in the Stock Purchase Agreement and is anticipated to occur during August 2010. The company has made a $1 million deposit into an escrow account; if the company determines — for other than a breach of the Stock Purchase Agreement — that it does not wish to close the acquisition, it will forfeit the deposit; otherwise, the deposit will be applied to the purchase price at closing . If the acquisition does not occur by certain dates, the purchase price may increase to a maximum of $29 million. The purchase price is also subject to adjustment based on a post-closing net working capital calculation.
U.S. Auto Parts expects the integration of the companies to be completed in 2011.
