U.S. Auto Parts has acquired Whitney Automotive Group, best known for its J.C. Whitney brand, for $27.5 million. As part of the deal, U.S. Auto Parts also assumes $11 million in trade-related and other payables.
The 95-year-old Whitney Automotive Group is part of a group of brands that distribute aftermarket automotive parts primarily focused on the “do it yourself” customers. Its brands include Stylintrucks.com, Carparts.com, and Allbikesupershop.com, which, along with J.C. Whitney.com, generate about 3 million monthly unique visitors.
Whitney Automotive Group is expected to record $110 million to $120 million in revenue under U.S. Auto Parts ownership in 2010.
When Tom West became CEO of J.C. Whitney two years ago, he told Multichannel Merchant that the automotive market is ideal for the Web. And indeed, the Whitney business has “really transformed itself from relying on catalogs to being an online business,” says Lee Helman, managing director for investment firm Financo.
J.C. Whitney has figured out how to make the Web a key ingredient in its culture and go-to-market strategy, Helman adds. “The company also became well-known and was approached multiple times by strategic partners, so it was a good time for the owners and management to take advantage of that opportunity to ensure a really strong future for the business.”
There are back-end advantages to the deal as well: Whitney Automotive Group owns a state-of-the-art distribution center located in Illinois. The facility holds about $15 million of owned inventory and was custom built for business-to-consumer fulfillment of auto parts.
The acquisition increases U.S. Auto Parts’ distribution footprint to three facilities. This should allow for 95% of its customers in the U.S. to receive parts within two days of purchase using ground or common carriage delivery.