Advance Auto Parts Inc. (NYSE:AAP) entered into a definitive agreement to acquire General Parts International, Inc. from Sloan family for an enterprise value of approximately $2 billion in cash on October 15, 2013. Advance Auto Parts intends to finance the acquisition through a combination of senior notes, bank debt and existing cash on hand. General Parts International reported revenues of $3 billion for 2012. In connection with the transaction, Advance has received a financing commitment from JPMorgan Chase Bank, N.A. and J.P. Morgan Securities LLC to provide debt financing for the transaction, consisting of a senior unsecured bridge facility. J.P. Morgan will arrange a new term loan and revolving credit facility to refinance loans and commitments under its existing credit agreement or to obtain an amendment to its existing credit agreement. Advance Auto Parts is raising $450 million through the issuance of notes and will the funds to fund the transaction. Advance Auto will have to pay a termination fee of $185 million, under certain circumstances.

O. Temple Sloan, III President of General Parts International, Inc. will continue as President of General Parts, reporting to Jackson and is expected to join the Advance Auto Parts Board of Directors. The combined company will be headquartered in Roanoke, Virginia and will continue to maintain a presence in Raleigh, North Carolina. The transaction is subject to the approval of the shareholders of General Parts International, antitrust approval, regulatory approvals and customary closing conditions. The deal is not subject to a financing condition. The transaction has been approved by the Board of Directors of Advance Auto Parts and General Parts International. The deal is expected to close by late 2013 or early 2014. The transaction is also expected to deliver significant estimated fiscal 2014 cash earnings per share accretion. As of December 20, 2013, the transaction is expected to close later in 2013 or in early 2014.

Blackstone Advisory Partners L.P. and Anu Aiyengar of J.P. Morgan Securities LLC acted as financial advisors to Advance Auto. Daniel Wolf, Michael Brueck, Dvir Oren and Benjamin Ritzo of Kirkland & Ellis LLP acted as legal advisor to Advance Auto in the deal. Wells Fargo Advisors, LLC and The Orr Group, LLC acted as financial advisors to General Parts, Manning Fulton & Skinner, P.A. and Heyward Armstrong, Katherine Biegler, Martin Brinkley, Clifton Brinson, Christopher Capel, David Clement, John Jernigan, Benji Jones, Amanda Keister, Lee Kirby, Jr., Byron Kirkland, Jason Martinez, Caryn McNeill, Miranda Miller, William Nelson, Susan Parrott, David Sartorio, Kimberly Swintosky, Jeffrey Truitt, Donald Tucker, Jr. and Craig Wheaton of Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. acted as legal advisors to General Parts in the deal. Paul Collins, Michael Kilby, Brian Pukier, Kevin Smyth, Hélène Bussières, and Diane Theophilopoulos of Stikeman Elliott LLP acted as legal advisors for Advance Auto Parts Inc. Michael Aiello and Lauren Lipson of Weil, Gotshal & Manges LLP acted as legal advisors for J.P. Morgan Securities LLC. David Schwartzbaum, Kemal Hawa and Aileen Kim of Greenberg Traurig acted as legal advisor to Blackstone Advisory Partners LP. Duff & Phelps Corporation acted as the financial advisor to the ESOP Fiduciary of General Parts International, Inc.

Advance Auto Parts Inc. (NYSE:AAP) completed the acquisition of General Parts International, Inc. from Sloan family on January 2, 2014.