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Genuine Parts' Dual Acquisition to Raise Revenues by $70M

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Genuine Parts Company (GPC - Free Report) has signed two agreements to acquire Auto-Camping, Ltd. and select assets of the Janitorial and Sanitation business of Rochester Midland Corporation. The transactions are expected to be completed by Jul 1, 2016, subject to the satisfaction of customary closing conditions. The acquisitions are likely to enhance the company’s annual revenues by $70 million.

Auto-Camping, Ltd., the leading distributor of original equipment import parts, operates through 20 locations in Canada. It produces original equipment automotive parts for European vehicles, selling them to foreign repair specialists and original equipment dealers.

The acquisition of Auto-Camping will complement Genuine Parts’ Olympus Import Parts acquisition. In addition, it will expand the company’s product offering and distribution capabilities in the import parts sector of the aftermarket. The buyout is expected to enhance Genuine Parts’ annual revenues by $50 million.

The Janitorial and Sanitation business supplies Janitorial and Sanitation accessories to around 400 distributors in North America. Genuine Parts will incorporate this business in the Impact Products division of S.P. Richards and its growing Facilities and Breakroom Supplies product offering. The acquisition of the Janitorial and Sanitation business is expected to enhance Genuine Parts’ annual revenues by $20 million.

Genuine Parts frequently undertakes acquisitions to expand its business. It is targeting smaller sized companies with annual revenues of $25–$150 million. In addition, the company is looking at new complementary distribution businesses of all sizes that will yield good return on investment. In May 2016, Genuine Parts announced that its Office Products Group has signed an agreement to acquire The Safety Zone LLC. This acquisition is expected to enhance annual revenues by $180 million.

Zacks Rank

Genuine Parts currently carries a Zacks Rank #4 (Sell).

Some better-ranked automobile stocks include Lear Corp. (LEA - Free Report) , Oshkosh Corporation (OSK - Free Report) and Superior Industries International, Inc. (SUP - Free Report) , all sporting a Zacks Rank #1 (Strong Buy).

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