General Automotive To Acquire SPEC
Published:05-February-2010
By Staff Reporter
General Automotivea, a provider of aftermarket parts and technology to automotive industry in North America, has signed an agreement to acquire privately-held SPEC. The transaction is expected to position it as an organization which capitalizes on both organic growth and inorganic strategic acquisition.
As per the agreement, General Automotive will issue 750,000 shares of restricted common stock to the current owners of SPEC, in addition to $2m cash. SPEC shareholders can earn shares over the next six years based on the achievement of certain revenue and profitability milestones.
SPEC, based in Birmingham, Alabama, is a provider of clutches and flywheels to automotive market. SPEC, which reported unaudited revenue of approximately $5.6m in 2009, will operate as a wholly-owned subsidiary of General Automotive. Additionally, SPEC executives will be retained to ensure smooth integration and operational continuity.
Closing of the SPEC transaction is subject to completion of due diligence and other conditions. In connection with the acquisition and with its overall growth plan, General Automotive expects to raise additional capital in 2010.
Dan Valladao, president and CEO of General Automotive, said: “The proposed acquisition is a critical milestone in the Company's strategy to acquire established businesses with strong growth and profit potential in the $265 billion automotive aftermarket parts industry.
“We expect the SPEC acquisition to help General Automotive and its current subsidiary OE Source continue to expand its product offerings. There are great synergies between the 2 companies that will allow each of them to improve distribution and revenue. In the meantime, we continue to evaluate additional acquisition targets.”
