Greensheet#04-11 Layout 1
Total Page:16
File Type:pdf, Size:1020Kb
www.thegreensheetonline.com ISSN 0889-3918 THE GREENSHEET Automotive Week FRIDAY, JANUARY 28, 2011 Issue #1,675 VOLUME XXXVII, NUMBER 4 Inside Reports O’REILLY, FLEETPRIDE, STRAUSS Meyer Distributing Announces Memphis Cross-Dock .... Page 2 RECEIVE HEALTH CARE WAIVERS Polk Inventory Efficiency Award Nominations Open ...... Page 2 FleetPride Makes Acquisitions In Missouri, N. Mexico .. Page 4 The U.S. Department of Health & Human Services has Johnson Controls’ Aftermarket Unit Sales Up 20% ........ Page 4 granted retail heavyweight O’Reilly Automotive, parts and Training Managers Conference Registration Open .......... Page 4 service chain Strauss Auto and truck parts supplier FleetPride Obituary: Jerry Barton, Former Genuine Parts Co. VP .... Page 5 a year-long waiver from some of the requirements in the 2010 Obituary: Butch VanderMolen, Wonderland Marketing .. Page 6 health care reform legislation. The approval means the companies Affinia Appoints Jeff Blocher Wix VP Of Sales .............. Page 6 — along with 219 other approved applicants as of Jan. 13 — find Advance Taps Outsider For Senior VP, Commercial ...... Page 6 themselves free from the restrictions of Section 2711 of the Thumbs Up/Thumbs Down ................................................ Page 7 Public Health Service Act, which says “a group health plan and a health insurance issuer offering group or individual health insurance coverage may not establish lifetime limits on the dollar BLOOMBERG REPORT SAYS PEP BOYS value of benefits for any participant or beneficiary.” LOOKING FOR A BUYER ONCE AGAIN On Friday, Jan. 21, Bloomberg News reported, citing “two O’Reilly Automotive, Strauss Auto and FleetPride appear to people with knowledge of the matter,” that Pep Boys has hired be the only major aftermarket companies on the list. Most of Bank of America Corp. to explore strategic options, which could the applicants — including the six biggest as ranked by number include a sale of the Philadelphia-based parts and service chain. of enrollees — are insurance companies or union-affiliated health plans. [Continued on Page 3] Rumor of Pep Boys once again being up for sale sent the company’s shares soaring upward — reaching a high of $15.96 DORMAN SENIOR VP IS RESIGNING before closing Friday’s trading at $14.15 for a 14.85 percent Fred Frigo has informed Dorman Products (Colmar, PA) increase on the day. that he will be resigning as the company’s senior vice president of operations to “pursue other personal and professional interests,” Pep Boys said the New York Stock Exchange had contacted according to a Jan. 25 filing with the SEC. His resignation will be the company about the unusual market activity in its common effective Dec. 31, 2011. Frigo joined Dorman in 1997 as director stock. In response, the company said its policy is not to comment of operations and was promoted to senior vice president in 2003. on unusual market activity. Members of the media and analysts Prior to joining the company, Frigo was a plant manager for were quick to pounce on the fact that Pep Boys didn’t deny that it’s Cooper Industries (Federal-Mogul), where he was responsible considering a sale of the company. [Continued on Page 2] for the Wagner brake plant in Boston and, following that, the Wagner lighting operations in Boyertown, PA. REMY INT’L CONSIDERING AN IPO Remy International may be going public this year, ZUCCHERO OUT AS CARQUEST CIO according to a Jan. 24 Bloomberg News report. The business Joe Zucchero, the chief information officer at Carquest/ and financial news service quotes Remy president and CEO General Parts International since 2005, has apparently parted John Weber as saying that an initial public offering of the ways with the Raleigh, NC-based company, where, since 2008, he Pendleton, IN-based company’s stock is being considered. had also served as president and chief operating officer of its Remy also is open to a merger or acquisition, according to Carquest Technologies LLC subsidiary. Carquest representatives Bloomberg, as a means to generate money for its growth did not return calls seeking comment on the departure or who, if initiatives. [Continued on Page 4] anyone, now fills the roles Zucchero held. [Continued on Page 6] Molinaro Communications, Inc. Subscription Info.: (Toll Free) 1-877-694-6076 Gary Molinaro, Editor & Publisher P.O. Box 355 www.thegreensheetonline.com [email protected] 330-688-4960 Munroe Falls, OH USA 44262-0355 46 Weekly Issues...Via E-Mail Only!!! 1-866-926-0452 (fax) $210 per year The Greensheet, founded 1975. $100 off for 1st-time subscribers! Marc Vincent, Managing Editor Also, Service Executive, published [email protected] 16 times per year, covering Classified Advertising 216-901-2090 the professional service market. E-mail: [email protected] John Booth, Contributing Editor Chuck Laverty, Founder Advertising Fax: 1-866-926-0452 [email protected] © 2011, Molinaro Communications, Inc. 17 United States Code, The Copyright Act, prohibits reproduction of this copyrighted material without permission of the owner. 2 January 28, 2011 Automotive Week PEP BOYS REPORTEDLY LOOKING FOR A BUYER YET AGAIN . [Continued from Page 1] So, who could be a buyer? Tony Cristello and Allen Hatzimanolis of BB&T Capital Markets took a look at this in a report dated Jan. 24. Right off the bat, the analysts said they don’t foresee any strategic buyers that would be interested in Pep Boys … Not Advance Auto Parts. Not AutoZone. Not O’Reilly Automotive, Monro Muffler Brake, the Genuine Parts Co. or Carquest. “Although, it’s possible that an international buyer could have some interest similar to when Sumitomo acquired TBC in 2005 for purposes of distribution or when Japan’s Autobacs Seven acquired Strauss Auto (similar model to Pep Boys) out of Chapter 11 in 2007,” Cristello and Hatzimanolis admitted in their report. BB&T’s prediction is that, if Pep Boys was to be bought, the buyer would be a private equity group, “perhaps looking to merge the assets of Pep Boys with another auto aftermarket holding company.” The issue, however, with Pep Boys — the BB&T report states — remains a structural one in that the company’s approximately 560 Supercenter locations (at 20,000-plus square feet each) lack critical market density and sales productivity. “A potential solution (currently in process) could be found in the development of a hub-and-spoke model, in which Pep Boys would acquire a number (likely north of 2,000) of service stores over time and use its larger Supercenter locations for distribution,” Cristello and Hatzimanolis contend in their report. “While this process would take a number of years (perhaps seven to ten), we believe that this is the only way in which the Pep Boys model could be restructured successfully. That being said, while a multiyear build-out of spoke service locations may be the best option for Pep Boys, we are not sure that a private equity firm looking to consolidate the still very fragmented automotive service market would get the best return by buying Pep Boys and using its large Supercenters for in-house distribution.” “Pep Boys still has great brand equity, but we just find it difficult to believe that a private equity firm is likely to bring enough service stores in tow for a potential asset combination with Pep Boys to justify the substantial investment in its current Supercenter formats,” the analysts conclude. Nonetheless, BB&T can’t rule out the possibility of a private equity buy out of Pep Boys. This isn’t the first time Pep Boys has been put up on the block. Back in 2006, the company’s board of directors engaged Goldman Sachs, its long-term financial advisor, to explore strategic and financial alternatives for Pep Boys. The process concluded later that year with no potential investors coming forward with an offer to purchase the entire company. What’s different today?, BB&T asked in its report. “In our minds, Pep Boys has always been considered for sale, particularly given the very activist board/shareholder involvement associated with the company. The last ‘official’ time we can recall Pep Boys exploring strategic options it was a much different company: poorly run with limited strategic vision, bad inventory mix and a model that, in our opinion, was simply structurally flawed. If there was any point in time where private equity or a strategic buyer should have been interested, it was then,” Cristello and Hatzimanolis wrote. MEYER DISTRIBUTING ANNOUNCES MEMPHIS, TN CROSS-DOCK Meyer Distributing, an automotive specialty products company based in Jasper, IN, has added a new location in Memphis, TN. This new cross-dock will have a direct feed from Meyer’s Jasper hub distribution center and will allow the company to provide early morning route delivery to the Memphis metro area four days per week. “The new Memphis cross-dock is lined up strategically with our busy Dallas, TX shipping lane and will provide the Memphis metro area with the industry’s highest level of service,” said Jason Braun, executive vice president. “The new Memphis dock is just one of many in the plans for 2011 as we continue to expand our logistical network to better serve our customers.” POLK INVENTORY EFFICIENCY AWARD NOMINATIONS OPEN Applications are now being accepted for the 2011 Polk Inventory Efficiency Awards, which honor aftermarket retailers and distributors, as well as manufacturers, that excel in inventory and supply chain efficiency. The awards are presented during the Global Automotive Aftermarket Symposium (GAAS). For more information, visit www.polk.com. Entries are due March 4. © 2011, Molinaro Communications, Inc. 17 United States Code, The Copyright Act, prohibits reproduction of this copyrighted material without permission of the owner. Automotive Week January 28, 2011 3 O’REILLY, FLEETPRIDE, STRAUSS RECEIVE WAIVERS .