BOUCHERVILLE, Quebec — Uni-Select has concluded agreements for the sale of the assets of its Palmar Heavy Duty Group in Canada. Part of the division, which provides replacement parts, tools and accessories for heavy-duty vehicles, is being sold to UAP Inc., a Canadian subsidiary of Genuine Parts Co. The wheels division is being sold to Robert Thibert Inc.
Uni-Select said these two transactions should generate $22 million in cash in the third quarter and result in a non-recurring loss of approximately $5 million. Uni-Select will use proceeds of the sales to reduce debt, and interest expense will decrease accordingly.
The results of Heavy Duty Group, with annual sales of $65 million, or 5 percent of Uni-Select’s overall revenues, will be presented as discontinued activities in the second quarter results to be announced on Aug. 5.
"Over time, our Heavy Duty Group deployed efforts to grow market share in Canada but did not attain the desired level of profitability. With the downturn in the transport industry, we have come to the conclusion that it would be in the best interest of Uni-Select to focus on its core activities related to the distribution of automotive replacement parts and accessories. These transactions are in keeping with the guidelines of our strategic plan. We intend to continue our growth through acquisitions in both Canada and the United States."
"In discussions leading to the agreements, the purchasers have expressed their interest in retaining a majority of Palmar’s employees. I would like to thank all of Palmar’s employees for their contribution and commitment over the years," said Richard Roy, president and chief executive officer of Uni-Select.
The transactions should be completed on or before Aug. 17 and are subject to customary closing conditions.
