I found this item on an auto industry news site:
The third largest auto-parts company in the country announced Tuesday that it is buying CSK Auto Corp. of Phoenix, parent of Checker Auto, and said the Checker name eventually could go away.
O'Reilly Automotive Inc. of Springfield, Mo., is buying CSK for about $1 billion in a deal that includes the assumption of about $500 million in CSK debt. Shareholders will get $11 of O'Reilly common stock and $1 in cash for each share of CSK stock.
Greg Henslee, O'Reilly's chief executive officer, said many details still have to be worked out, including whether there will be layoffs and what store names and brands will remain. CSK also operates Schuck's Auto Supply, Kragen Auto Parts and Murray's Discount Auto Stores.
"We really aren't at a point where we would be able to determine what the combined companies will look like," he said.
It is certain, however, that metro Phoenix is losing another corporate headquarters.
Cid Wilson, an analyst with Kevin Dann & Partners of New York City, said it's likely CSK's top managers may be let go while store managers remain. In past mergers, he said, O'Reilly has rarely kept top executives.
"O'Reilly is well-known for acquiring a company and pretty much integrating their own system," he said.
Wall Street applauded the merger by driving up CSK shares 26 percent to $11.70, making it the biggest gainer on the New York Stock Exchange, with about 16.8 million shares traded.
CSK shares have been trading at almost double their price, or between $9 and $10 a share, from January through March after O'Reilly made its initial $845 million offer.
In fact, the company, with its 85 percent increase in stock price, led Arizona companies for the past quarter in stock price gains.
This is O'Reilly's third main acquisition since the 1990s. In the past, the company rebranded the acquired stores and products to the O'Reilly name, Henslee said.
Founded in 1957, O'Reilly has 1,830 stores in 26 states in a wide swath from Louisiana and Alabama to North Dakota and Montana. And CSK has about 1,350 stores in 22 states throughout the West. Very few stores overlap in the same market, so there are not likely to be any store closings, Henslee said. With the merger, O'Reilly will cover two-thirds of the country.
Henslee said that even after the merger, the company will remain in third place behind AutoZone Inc. of Memphis and Advance Auto Parts of Roanoke, Va. But O'Reilly plans to keep growing, though at a slower rate this year than planned.
The Missouri company had planned to open 205 stores this year but now plans to cut back to 140 to 150 so it can concentrate on the merger, he said.
Because of the deal, the company expects to save about $100 million in costs beginning in 2010.
Another difference in the stores, besides geography, is that O'Reilly does about half of its business with repair shops and professional technicians and the other half with do-it-yourself customers. CSK stores mostly sell to do-it-yourselfers.
Henslee said the goal is to get all stores on a similar strategy.
Boards of directors of both companies have approved the sale.
Wilson said the deal was expected as CSK's sales have been depressed for about two years. The merger will enable O'Reilly to strengthen its commercial business by giving it more outlets in more states, he said.
"If you are an O'Reilly shareholder, you have got to be jumping up and down because you just got a great deal. You just got instant market dominance in the western half of the U.S. for just $12 a share," Wilson said.
Anyone know if O'Reilly is any better than Schuck's?
The third largest auto-parts company in the country announced Tuesday that it is buying CSK Auto Corp. of Phoenix, parent of Checker Auto, and said the Checker name eventually could go away.
O'Reilly Automotive Inc. of Springfield, Mo., is buying CSK for about $1 billion in a deal that includes the assumption of about $500 million in CSK debt. Shareholders will get $11 of O'Reilly common stock and $1 in cash for each share of CSK stock.
Greg Henslee, O'Reilly's chief executive officer, said many details still have to be worked out, including whether there will be layoffs and what store names and brands will remain. CSK also operates Schuck's Auto Supply, Kragen Auto Parts and Murray's Discount Auto Stores.
"We really aren't at a point where we would be able to determine what the combined companies will look like," he said.
It is certain, however, that metro Phoenix is losing another corporate headquarters.
Cid Wilson, an analyst with Kevin Dann & Partners of New York City, said it's likely CSK's top managers may be let go while store managers remain. In past mergers, he said, O'Reilly has rarely kept top executives.
"O'Reilly is well-known for acquiring a company and pretty much integrating their own system," he said.
Wall Street applauded the merger by driving up CSK shares 26 percent to $11.70, making it the biggest gainer on the New York Stock Exchange, with about 16.8 million shares traded.
CSK shares have been trading at almost double their price, or between $9 and $10 a share, from January through March after O'Reilly made its initial $845 million offer.
In fact, the company, with its 85 percent increase in stock price, led Arizona companies for the past quarter in stock price gains.
This is O'Reilly's third main acquisition since the 1990s. In the past, the company rebranded the acquired stores and products to the O'Reilly name, Henslee said.
Founded in 1957, O'Reilly has 1,830 stores in 26 states in a wide swath from Louisiana and Alabama to North Dakota and Montana. And CSK has about 1,350 stores in 22 states throughout the West. Very few stores overlap in the same market, so there are not likely to be any store closings, Henslee said. With the merger, O'Reilly will cover two-thirds of the country.
Henslee said that even after the merger, the company will remain in third place behind AutoZone Inc. of Memphis and Advance Auto Parts of Roanoke, Va. But O'Reilly plans to keep growing, though at a slower rate this year than planned.
The Missouri company had planned to open 205 stores this year but now plans to cut back to 140 to 150 so it can concentrate on the merger, he said.
Because of the deal, the company expects to save about $100 million in costs beginning in 2010.
Another difference in the stores, besides geography, is that O'Reilly does about half of its business with repair shops and professional technicians and the other half with do-it-yourself customers. CSK stores mostly sell to do-it-yourselfers.
Henslee said the goal is to get all stores on a similar strategy.
Boards of directors of both companies have approved the sale.
Wilson said the deal was expected as CSK's sales have been depressed for about two years. The merger will enable O'Reilly to strengthen its commercial business by giving it more outlets in more states, he said.
"If you are an O'Reilly shareholder, you have got to be jumping up and down because you just got a great deal. You just got instant market dominance in the western half of the U.S. for just $12 a share," Wilson said.
Anyone know if O'Reilly is any better than Schuck's?
