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Genuine Parts (GPC) to Issue $1B Senior Notes, Closes KDG Buyout

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Genuine Parts Company (GPC - Free Report) recently announced the decision to raise $1 billion in senior notes. The proposed offering consists of $500 million of 1.75% senior notes due 2025 issued at a price equal to 99.721% of the face value of the notes, and $500 million of 2.75% senior notes due 2032 furnished at a price equal to 98.81% of the face value of the notes.

The offering is anticipated to be settled on Jan 10, 2022. The net proceeds will be used to repay a portion of the outstanding debt under the company’s unsecured revolving credit facility incurred to fund a significant portion of its recent buyout of Kaman Distribution Group.

GPC is issuing the senior notes by virtue of its shelf registration statement filed with the Securities Exchange Commission (SEC) on Oct 23, 2020, along with a preliminary prospectus supplement filed on Jan 6, 2022.

In separate news, Genuine Parts’ wholly-owned subsidiary, Motion Industries, Inc. recently completed the acquisition of Kaman Distribution Group ("KDG") in a $1.3-billion, all-cash deal.

Headquartered in Bloomfield, KDG is a leading distributor of industrial parts and operates more than 200 customer service centers and five distribution centers across North America. KDG offers more than six million items including bearings, mechanical power transmission, electrical and automation, material handling, motion control, fluid power to maintenance, repair, and operations (MRO) and original equipment manufacturing (OEM) customers in virtually every industry.

With an annual turnover of more than $6 billion, Motion is a leading industrial distributor of more than 10 million items, including bearings, mechanical power transmission products, electrical and industrial automation components.

GPC is highly ecstatic about this strategic acquisition, which will create significant opportunities for its customers, suppliers, teammates and shareholders. The company is optimistic about the future of its Motion team, as this latest buyout brings together the best-in-class talent and industrial expertise of these two organizations, creating a premier leader in industrial solutions.

The buyout will also bolster Genuine Parts’ scale and market position, while creating fresh opportunities for long-term growth, profits, and cash flow.

Zacks Rank & Other Key Picks

Genuine Parts currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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LKQ Corp has an expected earnings growth rate of 11.59% for fourth-quarter 2021. The Zacks Consensus Estimate for fourth-quarter 2021 earnings has been revised a penny upward in the past 90 days.

LKQ Corp’s earnings beat the Zacks Consensus Estimate in the last four quarters, delivering an earnings surprise of 34.37%, on average. LKQ has rallied 53.5% in the past year.