Advance Auto Parts sells Worldpac unit to Carlyle Group for $1.5 bln
Technology
Advance Auto Parts sells Worldpac unit to Carlyle Group for $1.5 bln
(Reuters) - Advance Auto Parts said on Thursday it would sell its Worldpac unit to private equity firm Carlyle Group for $1.5 billion in cash as part of its latest attempt at streamlining operations, but cut its annual results forecast.
Shares of automotive afterparts providers were down about 11% in premarket trade.
The company has been under heavy pressure from activist investors who have taken stakes in the firm and pressed it to offload Worldpac, a wholesale parts distribution business, as it navigates a turnaround.
Centerview Partners served as financial advisor to Advance, while Hogan Lovells US served as legal advisor on the transaction, which is expected to close before the end of the year.
Advance also cut its annual sales and profit forecasts on Thursday after a bumpy demand for auto parts.
It now expects its net sales in 2024 to be between $11.15 billion and $11.25 billion, down from its prior expectations of $11.3 billion and $11.4 billion.
Advance expects annual profit per share to be between $2 and $2.50, compared with the prior forecast of $3.75 and $4.25.
Worldpac generated about $2.1 billion in revenue for the year ended June 30.
Advance acquired Worldpac in 2014 when it bought General Parts International.
Its stock tumbled around the time S&P Global Ratings downgraded its debt to "junk".
