Uni-Select Inc.
TSX : UNS

Uni-Select Inc.

February 09, 2015 16:39 ET

Uni-Select Enters Into Agreement to Sell US Automotive Parts Distribution Activities for US$340 Million

Transaction enables Uni-Select to repay debt and a portion of its vendor financing program and to focus on growth of its US paint and Canadian automotive distribution activities where the Corporation holds market leadership positions

Unless otherwise indicated in this press release, all amounts are expressed in US dollars.

BOUCHERVILLE, QUEBEC--(Marketwired - Feb. 9, 2015) - Uni-Select Inc. (TSX:UNS), a major automotive aftermarket parts and paint products distributor with activities across North America, today announced that it has entered into an agreement for the sale of substantially all of the assets of Uni-Select USA, Inc. and Beck/Arnley Worldparts, Inc. to an affiliate of Icahn Enterprises L.P. at a purchase price of approximately $340 million, subject to adjustments based on the net tangible book value of assets sold at closing.

The transaction results from preliminary discussions initiated in January 2015 which led to the agreement for the sale of 39 distribution centres and satellite locations, 240 corporate stores and a total of 2,960 teammates. FinishMaster, Uni-Select's automotive paint distribution activities, as well as its Canadian automotive parts and paint distribution business unit are not subject to the transaction.

The transaction is expected to close during the first half of 2015 and is subject to customary closing conditions, including obtaining regulatory approvals. The transaction has been approved by the Board of Directors of Uni-Select. The Board considered among other things an opinion from RBC Capital Markets that the consideration to be received by the Corporation under the transaction is fair, from a financial point of view. The transaction is not subject to shareholder approval.

"We are very pleased with the agreement and its terms. Building on the momentum of the positive fourth quarter and Fiscal 2014 financial results to be announced Thursday, today's transaction unlocks value for our shareholders, strengthens our balance sheet, profitability and future growth potential, while enabling us to repay our debt. After a thorough review of our operations, we have concluded that the sale of our US automotive parts distribution activities is in the best interests of the Corporation and our shareholders and will allow us to focus on our current strengths and core businesses", said Uni-Select President and Chief Executive Officer, Richard G. Roy. "Icahn Enterprises is a large company with resources to grow and strengthen the business and is committed to a seamless transition for customers, manufacturer partners and team members. I also wish to sincerely thank the Uni-Select teammates impacted by the transaction for their commitment, professionalism and dedication to serving our customers", added Mr. Roy.

"Today's announcement reflects our strong commitment to our automotive parts and paint distribution activities in Canada and our automotive paint distribution activities in the US through FinishMaster, and allows us to further accelerate growth, both organically and through acquisitions as both markets present various opportunities for future development", said Uni-Select Chief Operating Officer, Henry Buckley.

In connection with the transaction, Uni-Select has also entered into a transition agreement with the acquirer to ensure an orderly and smooth transition for employees, customers and suppliers upon closing of the transaction.

In the first quarter of Fiscal 2015, the Corporation expects to incur an estimated after-tax loss ranging from $80 million to $100 million in connection with the sale of the net assets of the business units and other related charges. The loss will reflect transaction-related costs, the termination of service contracts, restructuring charges, a write-down of intangibles (mostly IT systems) and a write-down of a portion of goodwill. Approximately $20 million in after tax cash outlays are expected to be required to settle the transaction and restructuring costs.

ADVISORS

RBC Capital Markets acted as financial advisor to Uni-Select. McCarthy Tétrault LLP and Barnes & Thornburg LLP acted as Canadian and US legal counsel, respectively, to Uni-Select. Norton Rose Fulbright Canada LLP acted as legal counsel to the acquirer.

TRANSACTION CONFERENCE CALL

Uni-Select will host an investor conference call to discuss this transaction on February 9, 2015 at 6 PM (EST). To join the conference, dial 1 866 696-5910 followed by 7177888. Media representatives are invited to listen to the call, but questions will be restricted to the analyst community.

A replay of the conference call will be available until 11:59 PM (EST) on February 20, 2015. To access the replay, dial 1 800 408-3053 followed by 4462586. The conference call will also be archived on the Corporation's website at uniselect.com.

FOURTH QUARTER AND YEAR-END EARNINGS CONFERENCE CALL

Uni-Select will host an investor conference call to discuss its fourth quarter and year-end results on February 12, 2015 at 3 PM (EST). To join the conference, dial 1 866 696-5910 followed by 2686549. Media representatives are invited to listen to the call, but questions will be restricted to the analyst community.

A replay of the conference call will be available until 11:59 PM (EST) on February 19, 2015. To access the replay, dial 1 800 408-3053 followed by 2123020. The conference call will also be archived on the Corporation's website at uniselect.com.

ABOUT UNI-SELECT

Founded in 1968, Uni-Select is a major distributor of replacement parts, equipment, tools, accessories, paint and related products for motor vehicles in North America. Leader in the Canadian industry, Uni-Select is the 5th largest distributor in the United States and the leading independent distributor of automotive paint and related products in the country. With its 5,300 employees, Uni-Select efficiently services a wide network of independent installers and wholesalers, including over 6,700 that operate under one of its banner programs in North America. Uni-Select is headquartered in Boucherville and its shares are traded on the Toronto Stock Exchange (TSX) under the symbol UNS.

FORWARD-LOOKING INFORMATION

The information provided in this press release may include some forward-looking information, which could include certain risks and uncertainties, which may cause the final results to be significantly different from those listed or implied within this news release. Such risks and uncertainties may include, for example, the impact of the transaction on the business of Uni-Select as a whole and certain strategic benefits expected to result from the transaction. In addition, the completion and timing of the transaction are subject to closing conditions, termination rights and other risks and uncertainties. Accordingly, there can be no assurance that the transaction will occur within the timeline contemplated in this news release. For additional information with respect to risks and uncertainties, refer to the Annual Report filed by Uni-Select with the Canadian securities commissions. The forward-looking information contained herein is made as of the date of this press release, and Uni-Select does not undertake to publicly update such forward-looking information to reflect new information, subsequent or otherwise, unless required by applicable securities laws.

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