Auto Plus adds to marketing footprint in wake of Ichan’s Uni-Select deal

Nov. 10, 2015
Iconic investment guru Carl Ichan is bullish on the aftermarket as evidenced by Icahn Enterprises’ $340-million purchase of Uni-Select USA and Tennessee’s century-old Beck/Arnley Worldparts from Canada’s Uni-Select Inc.

Iconic investment guru Carl Ichan is bullish on the aftermarket as evidenced by Icahn Enterprises’ $340-million purchase of Uni-Select USA and Tennessee’s century-old Beck/Arnley Worldparts from Canada’s Uni-Select Inc.

“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-Select was available,” said Ichan in February when the transaction was first announced.

“We believe that with Icahn Enterprises’ great resources and our knowledge of the industry we will be able to grow this company, take advantage of consolidation opportunities, and thereby greatly benefit the company’s customers, manufacturer partners and employees, as well as the shareholders of Icahn Enterprises,” he explained.

Embracing the Auto Plus banner that Uni-Select USA rolled out in October of 2014, the new chan-owned entity is now to be known solely as Auto Plus, complete with the design of a new logo and a company-wide store rebranding initiative that will unfold throughout 2016.

Ichan’s Auto Plus acquisition, finalized in June, included 38 distribution centers and satellite locations, 240 corporately owned jobber stores and more than 3,500 employees in the U.S.

Uni-Select Inc., headquartered in Boucherville, Quebec, retains ownership of its FinishMaster automotive paint and related products distribution division in the U.S. along with its Canadian distribution network encompassing more than a dozen warehouses, nearly 200 stores more than 2,400 employees.

With Brent Windom as its president and CEO, Auto Plus is already embarking on an aggressive growth strategy as signaled by its recent opening of two new stores in Olean, N.Y., and Clinton, Miss., along with expanding its Dallas distribution center to cover 125,000 square feet of warehouse space.

The company also has purchased Central City Auto Parts in Cleveland, Tenn.; Xpress Auto Parts in Ft. Myers, Fla.; and the Wisconsin-based United Auto Parts distribution chain with locations in Fond du Lac, Sheboygan, Sheboygan Falls, Ripon, Waupun and Beaver Dam.

“Auto Plus has been aggressively positioning itself to become a top tier automotive aftermarket company. These recent acquisitions help push us toward this goal,” according to Windom. “Our plan is an accelerated one and these recent successes are a reflection of our commitment to growth. These newly acquired stores build toward our new hub-and-spoke distribution model. We expect strategic growth through acquisition to continue into 2016 and beyond.”

The impact is certainly being felt along Third Street in Fond Du Lac, Wis., where United Auto Parts, established in 1930, is headquartered.

Given the consolidations being experienced throughout the aftermarket, “the timing was right” to sell the operation when Auto Plus came calling with an offer, according to Trace Blakely, a former co-owner of United Auto Parts who will stay on to assist with the transition. The business had been in the Blakely family since the since the 1940s.

“I’m working 30 hours a week instead of 60,” says Blakely, adding that he had been approached with purchase offers by other larger aftermarket businesses in the past but had passed on the deals.

“Auto Plus is going to be very aggressive in buying stores. There’s a roll-up in the industry and I figured it was better to be at the beginning of the roll-up rather than at the end of the roll-up,” Blakely tells Aftermarket Business World.

“It was just the next step in the organization and how it can grow; they have the horsepower to take it to the next level,” Blakely points out.

Moving quickly, Auto Plus is increasing the inventory by 30 percent and implementing a new computer system. “Our customers will benefit by having the inventory sooner,” says Blakely, “and they’re adding more deliveries” to augment the routing schedules.

An automotive machine shop that had been a part of United’s location in Fond du Lac has transitioned to an independent operation under the ownership of Scott Johnson, who began working at the family enterprise when he was 16.

“I was always helping out with grandpa and great-grandpa” when Harlan Johnson, now 76, and Harlan’s father Carl Johnson were specialists in the field of hydraulic gears, earning accolades from the President of the United States for their work in engineering critical components for the atomic bomb during World War II. Providing key infrastructural elements to ease the flow of vessels traversing the St. Lawrence Seaway was another milestone.

Carrying on a family tradition, Scott Johnson intends to be at the helm of the newly named Johnson Auto & Machining for a long time. “My great-grandfather Carl was still running the company until he was 97,” says Johnson.

Johnson was brought into the negotiating process as Auto Plus and United started their discussions. “Basically it’s something we had been working on since the beginning of June, end of May. The machine shop seemed to be new territory for them, and they didn’t seem interested in owning it – it was something that wasn’t part of their plan when they came in to buy the (United Auto Parts) business.”

And Johnson jumped at the opportunity. “We were able to come together and make a deal. It was very comfortable. We developed a closer relationship working together on this. Auto Plus took over the auto parts part of the store and I took over the machine shop part.”

Specializing in rebuilding parts for cars, tractors and other types of vehicles, Johnson expects the business to expand based on the heightened scope presented by the transactions and the prospect of increased referrals. “I have a great relationship with Auto Plus. The big game-changer is that Auto Plus is so large – they have a lot of resources,” he notes.

“I have access to a larger inventory – it’s all in-house for me,” Johnson continues. “We’re able to provide better service to our customers with quicker turn-around times. I’m able to compete with the Internet and other businesses in town. Right now I’m out here with the guys getting my hands dirty and putting my nose to the grindstone.”

Reflecting on the possibilities of growing the business, Johnson reports that “I want to give other people in this town opportunities – more jobs!”

Building market density

In the meantime, Canada’s Uni-Select has been pursuing growth plans of its own since the divesture of Uni-Select USA.

In September subsidiary FinishMaster bought Auto Paint Specialists, the APS Tower Paint Co. and L.I.C. Inc., aftermarket distributors located in Wisconsin, plus Dan’s Distributing Co. in Northern California. FinishMaster also opened its first branch in Auburn, Wash., just outside of Seattle, which “creates opportunity in a new market and is a key component of a larger development strategy across the Northwestern United States,” according to FinishMaster President and COO Steve Arndt.

Auto Paint Specialists opened its doors in 1987, serving the market for nearly three decades from two locations in Green Bay and Appleton, Wis. FinishMaster currently operates four additional locations in Wisconsin.

Dan’s Distributing, Co. was founded in 1979, serving the greater Central Valley and foothills of Northern California, bringing the number of Golden State FinishMaster locations up to 30.

Another recent purchase involves the Painters Supply Co. in Colorado, which has two locations in the state that join five other existing FinishMaster sites.

“This acquisition aligns well with our strategy to build density in key markets like Denver. The combination of our two businesses enables us to provide better service to more customers,” says Henry Buckley, Uni-Select’s president and CEO.

In October the company completed the purchase of its remaining 50 percent equity interest in Pieces d’Autos La Malbaie and, through one of its subsidiaries, the assets of Pieces d’Autos AFCAR.

“These acquisitions are in line with our objective to build a corporate store network in Canada and grow our business in Quebec,” says Gary O’Connor, president and COO of Uni-Select’s Automotive Canada division.

Founded in 1969, Pieces d’Autos La Malbaie is a parts and paint wholesaler with two locations in La Malbaie and Baie-Saint-Paul, Quebec.

Pieces d’Autos AFCAR, a Uni-Select member since 2013, is a wholesaler of aftermarket and remanufactured parts located in Gatineau, Quebec.

The company has expanded its reach into the nation’s Pacific Canada region via the September purchase of Duncan Auto Parts, which was established in 1963 with two stores in Duncan and Chemainus, British Columbia.

“We are pleased to add this great business to our network of corporate stores and solidify our market position on Vancouver Island,” O’Connor says.

And clear across the country, Uni-Select has strengthened its presence in the Maritimes by buying three C.B. Hoare Auto Parts locations in Nova Scotia that have become the company’s first corporate-owned stores in the Atlantic Canada region.

“We are proud to have this long time Uni-Select member continue to serve Ports Hawksbury, Antigonish and New Glasgow markets,” says O’Connor.

“This acquisition fits our strategy to support our Uni-Select customers with succession planning while building a complementary corporate store network in Canada,” Buckley points out.

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