Uni-Select Inc (UNS.TO), an automotive aftermarket parts and paint products distributor, on Monday agreed to sell most of the assets of Uni-Select USA Inc and Beck/Arnley Worldparts Inc to an affiliate of Icahn Enterprises L.P. (IEP) for about $340 million. The deal value is subject to adjustments based on the net tangible book value of assets sold at closing.
Uni-Select said the deal would help it to focus on its U.S. paint and Canadian automotive distribution activities, boost profit and unlock shareholder value as well as to repay debt.
The deal stems from preliminary discussions initiated in January 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, Uni-Select said.
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 deal.
The deal, which is to close during the first half of 2015, has been approved by the board of Uni-Select, and is not subject to shareholder approval.
In the first quarter of 2015, Uni-Selects 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. About $20 million in after tax cash outlays are expected to be required to settle the transaction and restructuring costs, the company said.
Meanwhile Icahn Enterprises said that the auto parts distribution business acquired from Uni-Select USA will be operated independently from Federal-Mogul Holdings Corp, an Icahn subsidiary and a supplier of automotive products and services.
In connection with the deal, Carl Icahn will resign as the chairman and member of the board of Federal-Mogul and Daniel Ninivaggi, the co-CEO of Federal-Mogul, will resign as a director of Icahn Enterprises L.P.
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