Canadian Manufacturing

Uni-Select to sell U.S. auto parts business in US$340M deal

Icahn Enterprises subsidiary buying U.S. auto parts division; Quebec-based Uni-Select retaining paint distribution business

BOUCHERVILLE, Que.—Uni-Select Inc. has reached agreement to sell its United States-based automotive parts distribution business to an affiliate of Icahn Enterprises L.P. for US$340 million.

The deal includes Beck/Arnley Worldparts, but excludes the Quebec-based company’s paint distribution business, FinishMaster, and its Canadian automotive parts operations.

The sale includes 39 distribution centres and 240 corporate stores that employ nearly 3,000 people.

Uni-Select will use the proceeds to repay debt while it focuses on its U.S. paint and Canadian operations, where it is a market leader.

The deal, which has been approved by Uni-Select’s board of directors, is expected to close in the first half of the year, subject to regulatory approvals.

“After a thorough review of our operations, we have concluded that the sale … will allow us to focus on our current strengths and core businesses,” CEO Richard Roy said.

Uni-Select expects to incur an after-tax loss of US$80- to US$100 million in the first quarter of 2015, reflecting transaction-related costs, restructuring charges and goodwill writedowns, among other balance sheet costs.

The company reports its fourth-quarter results next week and the consensus of analysts as compiled by Thomson Reuters is for an adjusted profit of US$11.5 million or 57 cents per share on US$423.6 million of sales.

That compares with adjusted earnings of US$13.2 million or 62 cents per share on US$425.58 million in sales in the final quarter of 2013.

Icahn Enterprises is a diversified holding company that controls companies with more than US$20 billion of assets in the investment, automotive, energy, gaming, rail car, food packaging, metals, real estate and home fashion sectors.

“With the advent of the bull market over the last five years, it has become increasingly difficult to find companies that we believe to be undervalued and with growth potential. That is why we were happy when we learned that the United States segment of Uni-Select was available,” said chair Carl Icahn.

The acquired business will be operated independently from Federal-Mogul Holdings Corp., the automotive products subsidiary of Icahn Enterprises.

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