Monday February 28, 7:01 am Eastern Time
Company Press Release
SOURCE: Delphi Automotive Systems Corporation
Delphi Signs Agreement to Acquire
Profitable European Aftermarket Channel
Purchase of Automotive Products Distribution Services (APDS) Provides
Platform for Expanded European Aftermarket Growth Initiative
Acquisition Comes Less Than Four Months After Creation of Delphi
Aftermarket Division
LONDON, Feb. 28 /PRNewswire/ -- Delphi Automotive Systems Corporation (NYSE: DPH -
news) announced today that it has reached an agreement to acquire the AP Distribution Services
(APDS) business of AP Group Limited for approximately U.S. $65 million in cash at an average
exchange rate. Completion of the transaction will take place immediately. The company, which
will be renamed Delphi Lockheed Automotive, will be integrated into Delphi's Aftermarket
Operations division.
``From a corporate perspective, this acquisition is in line with Delphi's strategy to generate
profitable growth and more than double European aftermarket sales in the next five years,' said
Jose Maria Alapont, President Delphi Europe.
``This transaction adds shareholder value because it meets Delphi acquisition objectives; is
accretive to earnings in the first year; allows for strategic growth in product lines; expands our
customer base; and adds managerial and aftermarket expertise to the Delphi organization,' said
Alapont.
``From an aftermarket perspective, the acquisition of APDS bolsters Delphi's position as the
aftermarket customer's partner-of-choice because we can now offer broader product lines and
services in an established distribution channel,' said Frank Ordonez, general manager of
Delphi's Aftermarket division. ``With a customer base ranging from national, regional and retail
distributors, APDS adds significantly to our current aftermarket customer base. APDS,
meanwhile, is strengthened by the support of Delphi's global manufacturing, engineering and
administrative resources and the industry's most diverse product portfolio. The combined
organization is focused on leading the European aftermarket,' he said.
APDS has total annual sales of approximately $175 million and employs over 700 people in 5
countries.
For Delphi, the acquisition exceeds a 20 percent return on invested capital, and meets its
financial objectives for acquisitions, including the immediate generation of shareholder value by
adding to earnings in 2000 and beyond. The business is expected to contribute positively toward
Delphi's goals of attaining a 5 percent net income margin and 12.5 percent return on net assets by
2002.
``When we created the Delphi Aftermarket division four months ago, one of the division's first
priorities was to enhance the relationships between Delphi and our major European aftermarket
customers,' said Ordonez. ``We also said acquisitions that can bring additional distribution,
product expertise, and services to Delphi would be part of our growth strategy. The addition of
APDS to the Delphi aftermarket division accomplishes these objectives,' he said.
APDS is a leading distributor of aftermarket products and supplies for passenger cars and
commercial vehicles throughout Europe. The company engineers, manufactures, remanufactures
and markets chassis and driveline components under the AP Lockheed© brand and the AP Borg
& Beck© brand. APDS has:
-- Distribution centers located in the UK, France, and Holland.
-- Manufacturing operations in the UK (including new and remanufactured
product), Holland (remanufactured product), and France (new
manufactured product).
-- Sales offices in Germany and Japan. |
