Advance Auto Parts will buy 1,418 outlets of the Carquest chain to boost its auto repair operations to complement its car parts business, sending its shares up as much as 20% to a record high. The retailer, which sells products such as batteries, engine parts and more, said it would buy General Parts International Inc. for just over $2 billion, creating the largest North American retailer of auto parts.
General Parts is the largest operator of the Carquest chain, which runs auto repair shops and car parts stores. It also owns Worldpac, the supplier of replacement parts for imported car and truck brands. Carquest and Worldpac had sales of $2.9 billion in the last 12 months.
Advance Auto said the General Parts purchase will hugely increase its customer reach from coast-to-coast in North America, where parts sales have slipped as more Americans buy new cars. The company has been trying to improve its footprint in the commercial repair industry. It brought the second-largest operator of Carquest stores, BWP Distributors Inc. in December. Commercial repair accounts for about 85% of Carquests' sales.
Advance Auto CEO Darren Jackson said commercial sales would jump to 55% of total revenue from 25% after the General Parts deal.
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