U.S.
Auto Parts to Acquire Whitney Automotive Group, One of the Nation's Largest,
Most Trusted Online Auto Parts Retailers
CARSON,
Calif., Aug 02, 2010 /PRNewswire via COMTEX News Network/ -- U.S. Auto Parts
(Nasdaq: PRTS), one of the largest online providers of automotive aftermarket
parts and accessories, today announced that it has signed a definitive Stock
Purchase Agreement to acquire Whitney Automotive Group for the purchase price of
$27.5mm and assumption of approximately $11mm in trade-related and other
payables. Whitney Automotive Group is expected to have $110 - $120 million in
revenues under U.S. Auto Parts ownership in 2010.
The
Whitney Automotive Group, a 95 year old company best known for the JC Whitney
brand, is part of a group of established brands that distribute aftermarket
automotive parts primarily focused on the "Do It Yourself" customer in the
automotive accessories aftermarket. Its brand portfolio includes
Stylintrucks.com, Carparts.com, and Allbikesupershop.com which, along with
JCWhitney.com, generate approximately 3mm monthly unique visitors.
"With
this acquisition, U.S. Auto Parts adds one of the most recognizable consumer
facing brands in the online auto parts market, which should increase our
customer reach, provide product line expansion and enhance our distribution
footprint," said U.S. Auto Parts' Chief Executive Officer Shane Evangelist.
"And, most importantly, we will be adding very talented team members who can
help U.S. Auto Parts take advantage of the favorable market conditions for the
online auto parts market."
In
addition to a leading presence in the accessories market, this acquisition also
provides U.S. Auto Parts with product line expansion into ATVs, RVs and
motorcycles, as well as deep product knowledge into niche segments like Jeep, VW
and truck enthusiasts.
Whitney
Automotive Group owns a $10mm state-of-the-art distribution center located in
Illinois which holds approximately $15mm of owned inventory and was custom built
for B2C distribution of auto parts. The acquisition would allow U.S. Auto Parts
to complete a three-distribution center network, and thus should increase its
distribution footprint and allow for 95% of customers in the US to receive parts
within two days of purchase using ground or common carriage.
"This
acquisition clearly demonstrates U.S. Auto Parts' commitment to the aftermarket
accessories category and we look forward to working with our new suppliers,"
said Evangelist.
"We
believe that the combination of Whitney's established brands and focus on the
customer experience, coupled with U.S. Auto Parts' capacity to compete online,
creates a huge opportunity for growth," said Whitney's Chief Executive Officer
Tom West.
Closing
of the acquisition is subject to certain conditions specified in the Stock
Purchase Agreement and is anticipated to occur during August 2010. The Company
has made a $1 million deposit into an escrow account; if the Company determines,
for other than a breach of the Stock Purchase Agreement, that it does not wish
to close the acquisition it will forfeit the deposit; otherwise, the deposit
will be applied to the purchase price at closing . If the acquisition does not
occur by certain dates, the purchase price may increase to a maximum of $29
million. The purchase price is also subject to adjustment based on a
post-closing net working capital calculation.
U.S. Auto
Parts expects the integration of the companies to be completed in
2011.
As
announced previously, the company will report financial results for the second
quarter ended July 3, 2010, on Monday, August 2, 2010, after market close,
followed by a conference call scheduled to begin at 2:00 pm Pacific Time (5:00
pm Eastern Time). Participating in the call will be Shane Evangelist, Chief
Executive Officer and Ted Sanders, Chief Financial Officer. The acquisition will
also be discussed on the call. Participants may access the call by dialing
1-877-941-8418 (domestic) or 1-480-629-9809 (international). In addition, the
call will be broadcast live over the Internet and accessible through the
Investor Relations section of the Company's website at www.usautoparts.net
where the call will be archived for two weeks. A telephone replay will be
available through August 16, 2010. To access the replay, please dial
1-877-870-5176 (domestic) or 1-858-384-5517 (international), passcode
4340251.
About U.S. Auto Parts Network,
Inc.
Established
in 1995, U.S. Auto Parts is a leading online provider of automotive aftermarket
parts, including body parts, engine parts, performance parts and accessories.
Through the Company's network of websites, U.S. Auto Parts provides individual
consumers with a broad selection of competitively priced products that are
mapped by a proprietary product database to product applications based on
vehicle makes, models and years. U.S. Auto Parts' flagship websites are located
at www.autopartswarehouse.com,
www.partstrain.com
and www.automd.com, and the
Company's corporate website is located at www.usautoparts.net.
U.S. Auto
Parts is headquartered in Carson, California.
About
Whitney Automotive Group
Established
in 1915, JC Whitney & Co. is one the largest direct marketer of name-brand
automotive parts and accessories, providing "everything automotive" with more
than 1 million automotive applications from the latest model year back to the
1920s. JC Whitney offers products for virtually any vehicle -- automobiles,
trucks, motorcycles, and more -- through its comprehensive family of general and
vehicle-specific catalogs and on the online at www.jcwhitney.com.
Safe
Harbor Statement
This
press release contains statements which are based on management's current
expectations, estimates and projections about the Company's business and its
industry, as well as certain assumptions made by the Company. These statements
are forward-looking statements for the purposes of the safe harbor provided by
Section 21E of the Securities Exchange Act of 1934, as amended and Section 27A
of the Securities Act of 1933, as amended. Words such as ''anticipates,''
"could," ''expects,'' ''intends,'' ''plans,'' "potential," ''believes,''
"predicts," "projects," ''seeks,'' "estimates," "may,'' ''will,'' "would," "will
likely continue" and variations of these words or similar expressions are
intended to identify forward-looking statements. These statements include, but
are not limited to, the Company's expectations regarding its future operating
results and financial condition, impact of changes in our key operating metrics,
our potential growth, our liquidity requirements, and the status of our auction
rate preferred securities. We undertake no obligation to revise or update
publicly any forward-looking statements for any reason. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties
and assumptions that are difficult to predict. Therefore, our actual results
could differ materially and adversely from those expressed in any
forward-looking statements as a result of various factors.
Important
factors that may cause such a difference for the Company in connection with this
acquisition include, but are not limited to, the risks inherent in acquisitions
of technologies and businesses, including the timing and successful completion
of the acquisition; the successful integration of the acquisition; costs and
unanticipated expenditures, changing relationships with customers, suppliers and
strategic partners, potential contractual, intellectual property or employment
issues, accounting treatment and charges, and the risks that the acquisition
cannot be completed successfully or that anticipated benefits are not realized;
availability and pricing of competing products and the resulting effects on
sales and pricing of our products.
Important
factors that may cause such a difference include, but are not limited to,
economic downturn that could adversely impact retail sales; marketplace
illiquidity; demand for the Company's products; increases in commodity and
component pricing that would increase the Company's per unit cost and reduce
margins; the competitive and volatile environment in the Company's industry; the
Company's ability to expand and price its product offerings, control costs and
expenses, and provide superior customer service; the mix of products sold by the
Company; the effect and timing of technological changes and the Company's
ability to integrate such changes and maintain, update and expand its
infrastructure and improve its unified product catalog; the Company's ability to
improve customer satisfaction and retain, recruit and hire key executives,
technical personnel and other employees in the positions and numbers, with the
experience and capabilities, and at the compensation levels needed to implement
the Company's business plans both domestically and internationally; the
Company's cash needs; any changes in the search algorithms by leading Internet
search companies; the Company's need to assess impairment of intangible assets
and goodwill; and the Company's ability to comply with Section 404 of the
Sarbanes-Oxley Act and maintain an adequate system of internal controls; any
remediation costs or other factors discussed in the Company's filings with the
Securities and Exchange Commission (the "SEC"), including the Risk Factors
contained in the Company's Annual Report on Form 10-K and Quarterly Reports on
Form 10-Q, which are available at www.usautoparts.net and the SEC's website at
www.sec.gov. You are urged to consider these factors carefully in evaluating the
forward-looking statements in this release and are cautioned not to place undue
reliance on such forward-looking statements, which are qualified in their
entirety by this cautionary statement. Unless otherwise required by law, the
Company expressly disclaims any obligation to update publicly any
forward-looking statements, whether as result of new information, future events
or otherwise.
Contacts:
Investor
Relations:
Ted
Sanders, Chief Financial Officer
U.S.
Auto Parts Network, Inc.
tsanders@usautoparts.com
(310)
735-0085
Budd
Zuckerman, President
Genesis
Select Corporation
bzuckerman@genesisselect.com
(303)
415-0200
Media
Relations:
Angela
Jacobson, mWEBB Communications, (714) 454-8776, angela@mwebbcom.com
Melanie
Webber, mWEBB Communications, (424) 603-4340, melanie@mwebbcom.com
