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Genuine Parts’ (GPC) UK-Based AAG Acquires 2 Businesses

Zacks

Genuine Parts Company’s GPC wholly-owned automotive distribution company, Alliance Automotive Group (“AAG”), completed the acquisition of two automotive businesses in the United Kingdom. Notably, these two newly added companies — Platinum International Group Limited (Platinum) and TMS Motor Spares Ltd. (“TMS”) — forms part of Genuine Part’s European operations.

Platinum is a value-added battery distributor, serving automotive, industrial, marine and leisure markets. At present, this Manchester, England-based company operates in 10 locations, including nine in the United Kingdom and one in the Netherlands. Platinum sells batteries to AAG, thus providing a boost to the latter’s battery sourcing platform and supply. Its acquisition is expected to generate annual revenues of $75 million, effective Oct 2, 2018.

Headquartered in Carlisle, England, TMS is a distributor of automotive parts with seven locations in England and 17 locations in Scotland. Apart from AAG’s expansion in the country, the TMS acquisition will provide AAG with its first self-owned stores in Scotland. In fact, this buyout is anticipated to generate annual revenues of $30 million, effective Aug 31, 2018.

Genuine Parts Company Price and Consensus

Per management, these two latest transactions by AAG will strengthen its scale and existence in Europe, in sync with the company’s global growth strategy.

Genuine Parts has also been acquiring business in Europe through its wholly-owned subsidiary AAG to improve product offerings and expand its geographical footprint. Earlier in June, AAG announced the acquisition of Germany-based European automotive business — Hennig Fahrzeugteile Group.

Price Performance

In the past six months, Genuine Parts’ stock has gained 11.7%, outperforming 0.6% increase recorded by the industry it belongs to.




Zacks Rank & Key Picks

Genuine Parts currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the Auto space are AutoZone, Inc. AZO, Navistar International Corporation NAV and Advance Auto Parts, Inc. AAP. AutoZone and Navistar carry a Zacks Rank #2 (Buy), while Advance Auto Parts sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AutoZone has an expected long-term growth rate of 12.2%. Over the past six months, shares of the company have gained 25.4%.

Navistar has an expected long-term growth rate of 5%. Shares of the company have increased 12.6% over the past six months.

Advance Auto Parts has an expected long-term growth rate of 12.3%. Shares of the company have surged 50.2% over the past six months.

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