Billionaire activist-investor Carl Icahn gives an interview on FOX Business Network in New York in this file photo taken February 11, 2014.BRENDAN MCDERMID/Reuters
Uni-Sélect Inc. has reached agreement to sell its U.S. automotive parts distribution business to an affiliate of Icahn Enterprises for $340-million (U.S.).
The deal includes Beck/Arnley Worldparts, but excludes the Quebec-based company's paint distribution business, FinishMaster, and its Canadian automotive parts operations.
The sale includes 39 distribution centres and 240 corporate stores that employ nearly 3,000 people.
Uni-Sélect will use the proceeds to repay debt while it focuses on its U.S. paint and Canadian operations, where it is a market leader.
The deal, which has been approved by Uni-Sélect's board of directors, is expected to close in the first-half of the year, subject to regulatory approvals.
"After a thorough review of our operations, we have concluded that the sale ... will allow us to focus on our current strengths and core businesses," CEO Richard Roy said Monday.
Uni-Sélect expects to incur an after-tax loss of $80-million to $100-million in the first quarter of 2015, reflecting transaction-related costs, restructuring charges and goodwill writedowns among other balance sheet costs.
The company reports its fourth-quarter results next week and the consensus of analysts as compiled by Thomson Reuters is for an adjusted profit of $11.5-million or 57 cents per share on $423.6-million of sales. That compares with adjusted earnings of $13.2-million or 62 cents on $425.58-million in sales in the final quarter of 2013.
Icahn Enterprises is a diversified holding company that controls companies with more than $20-billion of assets in the investment, automotive, energy, gaming, rail car, food packaging, metals, real estate and home fashion sectors.
"With the advent of the bull market over the last five years, it has become increasingly difficult to find companies that we believe to be undervalued and with growth potential. That is why we were happy when we learned that the United States segment of Uni-Sélect was available," chairman Carl Icahn said.
The acquired business will be operated independently from Federal-Mogul Holding, the automotive products subsidiary of Icahn Enterprises.