MEMPHIS, Tenn. — The recent merger of two prominent program groups verifies that there is, indeed, strength in numbers.
Days after the announcement of the partnership between Independent Auto Parts of America (IAPA) and Parts Plus, unanimously approved by the groups’ respective boards, the combined network’s co-presidents discussed the road ahead with Aftermarket Business.
Now known as the Automotive Distribution Network (ADN), the new umbrella group will comprise 51 members, 242 WDs and more than $2 billion in annual sales.
Both groups are expected to retain their existing marketing programs and private labels in the foreseeable future, but whether or not ADN will have its own marketing program will be decided by the board, says Mike Kamal, co-president of the network and executive director of IAPA.
“Both groups have a lot of time, energy and money invested in their brands,” he says, adding one of the merger’s goals is to have as little disruption for program group members as possible. “Certainly, now that we’ve doubled our size, we’re actively involved in discussions with all of our vendors to increase our purchasing power and market potential.”
Future recruitment efforts, and whether they will bring someone to the Parts Plus or IAPA camp, will be determined by the geographic location and marketing needs of each prospective member, though the groups will not compete with each other, Kamal adds.
There are no immediate plans for other program groups to join the network, but “anything’s possible,” shares Mike Lambert, president of Parts Plus and co-president of the combined group.
During negotiations and planning for this agreement, the groups took their cue from Quebec-based Uni-Select’s acquisition of Middle Atlantic Warehouse Distributors and the versatility of brands that the warehouse merger now creates, says Lambert. “Going forward, the accounts we can solicit are unlimited now.”
He also credits Mark Bond of Quality Automotive Warehouse in Baltimore, Md. and Stephen Sattinger of Merle’s Automotive in Tucson, Ariz. with negotiating crucial aspects of this deal.
“They’re two guys who saw the goal and were able to compromise,” says Lambert.
Success in a situation such as this boils down to the “human factor,” says Kamal. “To find the right chemistry, we’re very fortunate.”
Additionally, “all of us owe quite a bit of gratitude to Dick Morgan and the Alliance,” he adds. “They’ve pretty much set a standard in this; they’ve crafted a really good blueprint.”
The Alliance notwithstanding, discussions for mergers such as this have been going on in the industry for at least four or five years, according to Kamal, but, “The issue that’s always a problem is getting the right match of companies, egos and warehouse location. It’s a difficult mating dance for a lot of people.”
Probably the most pressing issue facing program groups is technology, he adds. “For me, that’s the most exciting thing about this merger: it creates, by far, the best company for promoting and providing cost-effective technology.”
The newly combined network will be headquartered in Memphis, Tenn.