Uni-Select Enters Into Agreement to Sell US Automotive Parts Distribution Activities for US$340 Million

#aftermarket — Uni-Select Inc. has entered into an agreement for the sale of substantially all of the assets of Uni-Select USA, Inc. and Beck/Arnley Worldparts, Inc. to an affiliate of Icahn Enterprises L.P. at a purchase price of approximately $340 million, subject to adjustments based on the net tangible book value of assets sold at closing.

The transaction results from preliminary discussions initiated in January 2015 which led to the agreement for the sale of 39 distribution centres and satellite locations, 240 corporate stores and a total of 2,960 teammates. FinishMaster, Uni-Select’s automotive paint distribution activities, as well as its Canadian automotive parts and paint distribution business unit are not subject to the transaction.

Unless otherwise indicated in this press release, all amounts are expressed in US dollars.

The transaction is expected to close during the first half of 2015 and is subject to customary closing conditions, including obtaining regulatory approvals. The transaction has been approved by the Board of Directors of Uni-Select. The Board considered among other things an opinion from RBC Capital Markets that the consideration to be received by the Corporation under the transaction is fair, from a financial point of view. The transaction is not subject to shareholder approval.

“We are very pleased with the agreement and its terms. Building on the momentum of the positive fourth quarter and Fiscal 2014 financial results to be announced Thursday, today’s transaction unlocks value for our shareholders, strengthens our balance sheet, profitability and future growth potential, while enabling us to repay our debt. After a thorough review of our operations, we have concluded that the sale of our US automotive parts distribution activities is in the best interests of the Corporation and our shareholders and will allow us to focus on our current strengths and core businesses”, said Uni-Select President and chief executive officer, Richard G. Roy. “Icahn Enterprises is a large company with resources to grow and strengthen the business and is committed to a seamless transition for customers, manufacturer partners and team members. I also wish to sincerely thank the Uni-Select teammates impacted by the transaction for their commitment, professionalism and dedication to serving our customers,” added Mr. Roy.

“Today’s announcement reflects our strong commitment to our automotive parts and paint distribution activities in Canada and our automotive paint distribution activities in the US through FinishMaster, and allows us to further accelerate growth, both organically and through acquisitions as both markets present various opportunities for future development”, said Uni-Select Chief Operating Officer, Henry Buckley.

In connection with the transaction, Uni-Select has also entered into a transition agreement with the acquirer to ensure an orderly and smooth transition for employees, customers and suppliers upon closing of the transaction.

In the first quarter of Fiscal 2015, the Corporation expects to incur an estimated after-tax loss ranging from $80 million to $100 million in connection with the sale of the net assets of the business units and other related charges. The loss will reflect transaction-related costs, the termination of service contracts, restructuring charges, a write-down of intangibles (mostly IT systems) and a write-down of a portion of goodwill. Approximately $20 million in after tax cash outlays are expected to be required to settle the transaction and restructuring costs.