Genuine Parts (GPC) To Acquire Automotive Company In Europe

Genuine Parts Company (NYSE:GPC) announced the acquisition of a Germany-based European automotive business, Hennig Fahrzeugteile Group. The company’s wholly-owned U.K.-based automotive distribution company Alliance Automotive Group (AAG) has signed the agreement to acquire the business. Depending upon regulatory approvals and closing conditions, the deal is anticipated to close by Aug 1, 2018.

Headquartered in Essen, North Rhine-Westphalia, Hennig Fahrzeugteile is a leading supplier of commercial and light-vehicle parts. The company has 31 branches across Germany, mostly consisting of independent workshops and retailers, and it caters to more than 9,000 customers. Also, the company is expected to generate annual sales of roughly $190 million.

Per management, the acquisition of Hennig Fahrzeugteile will further increase the company’s footprint in the continent, which is in sync with its global growth strategy. Also, the inclusion of the company will benefit Genuine Parts financially and include another competitive network to serve the customers.

Genuine Parts Company Price and Consensus

Genuine Parts has been looking for acquisitions to improve its product offerings and expand the geographical footprint. In November 2017, the company completed the acquisition of London-based AAG for $2 billion, including the repayment of AAG's outstanding debt.

Price Performance

In the past six months, Genuine Parts stock has moved up 2%, outperforming 3% decline of the industry it belongs to.

Zacks Rank & Stocks to Consider

Genuine Parts currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Ferrari N.V. (NYSE:RACE) , General Motors Company (NYSE:GM) and Magna International Inc. (NYSE:MGA) . Presently, each of these stocks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ferrari has an expected long-term growth rate of 17.3%. Shares of the company have risen 55.4% over the past year.

General Motors has an expected long-term growth rate of 5.5%. Shares of the company have risen 27.6% over the past year.

Magna has an expected long-term growth rate of 8.5%. Shares of the company have risen 44.1% over the past year.

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