Advance Auto set to make $2 billion acquisition

Advance Auto Parts Inc. has signed a definitive agreement to buy auto parts retailer General Parts International Inc. (GPI) for $2.04 billion, setting the company up to become the largest auto parts retailer in North America.

GPI is a leading private distributor and supplier of equipment and aftermarket replacement products for commercial markets, operating under the CARQUEST and WORLDPAC brands.

The company says it will have combined sales of more than $9.2 billion. AutoZone Inc., currently the largest auto parts retailer in North America, reported sales of $9.1 billion for the fiscal year ending Aug. 31.

The acquisition will widen the company’s reach across North America, adding 1,246 company-owned and 1,418 independently owned CARQUEST locations. It also adds new product lines to Advance Auto, including heavy duty parts and paint.

O. Temple Sloan III will remain president of GPI. The combined company will have its headquarters in Roanoke and will continue a presence in Raleigh, N.C., where GPI is based.

Advance Auto plans to finance the acquisition through a combination of senior notes, bank debt and existing cash on hand.

The transaction, which is subject to regulatory approval and customary closing conditions, is expected to close in late 2013 or early 2014.