General Parts International, a company founded in downtown Raleigh a half-century ago that quietly developed a national chain of more than 2,600 Carquest auto parts stores, is being acquired for $2.04 billion in cash by Virginia-based Advance Auto Parts.
The sale puts an exclamation point on the extraordinary business career of O. Temple Sloan Jr., 74, who founded General Parts in in a 20,000-square-foot building on South Saunders Street in 1962. Today its one of the states largest privately held businesses.
The companies said the deal announced Wednesday will create the No. 1 provider of automotive replacements parts in North America with combined sales of $9.2 billion.
We are confident that the strategy we are executing today can be game-changing from a company and an industry standpoint, Advance Auto CEO Darren Jackson said during a conference call with analysts.
General Parts has 1,246 company-operated and 1,418 independently owned Carquest stores in North America. Advance Auto has 4,018 stores.
The combined company will be based in Roanoke, Va., and will maintain a presence in Raleigh, where General Parts employs 500 workers.
In addition to Carquest, General Parts also has 102 Worldpac locations that import and distribute auto parts to repair shops that specialize in imports. General Parts has 17,000 employees and generated $2.9 billion in sales over the past 12 months.
Sloan, who remains chairman of General Parts, will take on an advisory role after the sale is completed, Advance Auto spokeswoman Shelly Whitaker said in an email.
O. Temple Sloan III, president of General Parts and Sloans son, will remain president of the General Parts business after the deal is completed.
The Sloans and their company have always kept out of the spotlight, and the $2 billion deal announced Wednesday didnt bring them out of their shell.
General Parts spokeswoman Dorothy Brown Smith said neither Sloan was available for comment Wednesday. Nor did they participate in the conference call that Advance Auto officials conducted after the deal was unveiled.
Sloan Jr. also co-founded Highwoods Properties in 1978, a real estate investment trust that went public in 1994 and is today the Triangles largest office landlord. Sloan Jr. is now chairman of Raleigh-based Highwoods.
Sloan Jr. was inducted into the N.C. Business Hall of Fame in 2010. He also was a member of Charlotte-based Bank of Americas board of directors for 13 years before resigning in 2009 along with a wave of other directors in the wake of investor criticism of the banks acquisition of Merrill Lynch.
Advance Auto said it expects to realize $160 million in annual cost savings within three years thanks to synergies created by the deal, which raises the possibility of layoffs.
Whitaker, the Advance Auto spokeswoman, said it will be business as usual for the Raleigh office for the immediate future. It is too early to know how this transaction will impact the Raleigh office staff.
Jackson said the transaction provides a compelling strategic opportunity to expand Advance Autos geographic presence. In January, the company acquired privately held Northeast car parts supplier B.W.P. Distributors Inc., accelerating its growth in the Northeast.
When vehicle sales tumbled a few years ago, auto parts retailers got a sales boost, as more Americans kept their vehicles longer and invested more in keeping them running.
But Americans have been buying new cars and trucks at a healthy pace in recent months, fueled by low interest rates, better credit availability and aging cars that need replacement.
The Associated Press and Bloomberg News contributed to this story.