Advance Auto Parts agreed on Wednesday to buy General Parts International, a privately held car parts maker, for $2.04 billion in cash.
The deal will make Advance a new giant of the car-parts segment, with annual sales of more than $9.2 billion. Adding General Parts, which specializes in servicing commercial customers, will also expand the company’s business lines.
Advance said that it expected the deal to generate about $160 million in annual cost savings within three years after closing. It is also expected to add to the company’s cash earnings per share by 20 percent for the 2014 fiscal year.
O. Temple Sloan III, the president of General Parts, will continue to hold that role after the deal’s closing, which is expected by early next year.
Advance plans to finance the deal through cash on hand and new bonds and loans.
The company also disclosed its financial results for the third quarter, including $170.7 million in operating income, up 13.5 percent from the same time last year. Its sales for the period rose 4.3 percent to $1.52 billion.
