Genuine Parts (GPC) Inks Agreement To Acquire Todd Group

Genuine Parts Company’s (NYSE:GPC) wholly-owned automotive distribution company — Alliance Automotive Group — recently signed an agreement to acquire Todd Group.

Genuine Parts is an automotive replacement parts distributor. The company also distributes industrial replacement parts and electrical specialty materials, primarily in the United States, Canada and Mexico.

Alliance Automotive is a leading distributor of light and commercial vehicle parts. It also offers garages different parts for repair and maintenance from a wide network of stores as well as outlets.

France-based Todd Group is a distributor of truck parts and accessories for the independent heavy-duty aftermarket and operates through a national network of 35 branches. The expected annual revenue generation from the business is $85 million.

The transaction is expected to close in the fourth quarter of 2019, subject to the satisfaction of customary closing conditions and applicable regulatory approvals.

The addition of Todd Group complements Alliance Automotive’s network and will enable Genuine Parts to expand its heavy-duty parts and services offering. Todd Group, with its impressive history, is likely to strengthen Genuine Parts’ position as the largest heavy-duty parts distributor in France.

The company is expected to witness benefits from synergies and other factors related to the acquisition. The acquisition is also likely to influence the company’s operations, economic performance, financial condition as well as demand for products and services in a favorable manner.

However, actual results or events can be quite the contrary. The inability to complete the acquisition, failure to obtain regulatory approvals, changes in legislation or government regulations along with general changes in economic conditions might pose as hindrances.

In the past six months, Genuine Parts has outperformed the industry it belongs to. The company’s shares have gained 4.4% against the industry’s 4.8% decline.

Zacks Rank & Stocks to Consider

Genuine Parts carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the auto space are Copart, Inc (NASDAQ:CPRT) , CarMax, Inc (NYSE:KMX) and AutoZone, Inc (NYSE:AZO) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Copart has an expected long-term growth rate of 20%. In the past six months, shares of the company have surged 53.9%.

CarMax has an expected long-term growth rate of 12.57%. In the past six months, shares of the company have rallied 37.5%.

AutoZone has an expected long-term growth rate of 12.2%. In the past six months, shares of the company have moved up 37.4%.

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