VOL. 129 | NO. 170 | Monday, September 1, 2014
AutoZone Agrees to Buy Parts Distributor
By Andy Meek
A few weeks ahead of its fiscal fourth quarter earnings announcement, Memphis-based AutoZone Inc. disclosed it’s reached a deal to buy Interamerican Motor Corp., the second-largest distributor of original equipment import replacement parts in the U.S.
Memphis-based AutoZone Inc. disclosed it has reached a deal to buy Interamerican Motor Corp., the second-largest distributor of original equipment import replacement parts in the U.S.
(Daily News File/Lance Murphey)
AutoZone is buying IMC, founded in 1962, from Wulf Gaertner Autoparts AG of Germany, which makes replacement parts for the automotive aftermarket. IMC CEO John Mosunic described the deal as a natural fit for both companies. AutoZone, he said, has a national footprint, strong culture built on customer service and operational expertise.
All that will be combined with IMC’s strength in selling to the import segment, Mosunic added.
“The company’s leadership in import car parts coverage will be an exceptional fit with AutoZone’s current product assortment,” AutoZone chairman, president and CEO Bill Rhodes said in a news release about the deal. “As we expand the IMC brand across the United States, we believe the IMC business model will mutually benefit both our retail and commercial customers.”
IMC currently operates 17 locations. AutoZone says IMC has been committed to offering an extensive parts line for all European and Asian cars, and original equipment brands are central to the IMC parts program.
IMC’s German parent described the deal as a step toward giving the company’s brands an enlarged distribution network in the U.S.
Terms of the deal weren’t immediately disclosed, but AutoZone isn’t shy about putting its cash to work for everything from acquisitions to share buybacks.
Word of the IMC deal comes a few months after AutoZone’s latest share buyback, the latest of which brings the total value of shares the company has repurchased since 1998 to almost $15 billion.
As of May 10, AutoZone had 4,950 stores in the U.S. – including in Puerto Rico – plus 374 stores in Mexico and four stores in Brazil.
Analysts at SunTrust Robinson Humphrey initiated coverage on AutoZone shares Aug. 27, giving a “neutral” rating to the stock. In other AutoZone stock news, JPMorgan Chase & Co. rated the stock as “neutral” on Tuesday, and in July, Stifel Nicolaus analysts downgraded the stock from buy to hold.
AutoZone’s next earnings report is Sept. 22. To put its earnings story in context, as of the company’s last earnings report in May, AutoZone has seen double-digit earnings-per-share growth every quarter since the latter part of the administration of President George W. Bush – 31 straight quarters.