Genuine Parts Company · NYSE:GPC
Genuine Parts — Merger or Acquisition (April 2018)
15 slides from Genuine Parts's merger presentation, Apr 12, 2018
Slide 1: Essendant and S.P. Richards: A Stronger, More Competitive Distributor of Business Products
Essendant and S.P. Richards A Stronger, More Competitive Distributor of Business Products April 12, 2018
Slide 2: Forward-Looking Statements
2 This presentation contains forward - looking statements, including statements regarding the proposed business combination transaction between Essendant Inc . (“ Essendant ”) and Genuine Parts Company (“GPC”) in which GPC will separate its Business Products Group and combine this business with Esse
Slide 3: Additional Information
Additional Information In connection with the proposed transaction, Essendant will file with the SEC a registration statement on Form S - 4 containing a proxy statement/prospectus of Essendant , and Rhino SpinCo, Inc . , a wholly - owned subsidiary of GPC created for the proposed transaction (“SpinC
Slide 4: Management Participants
Management Participants Ric Phillips President & CEO Carol Yancey Executive Vice President & CFO Rick Toppin President & CEO Paul Donahue President & CEO Janet Zelenka Senior Vice President, Chief Financial Officer 4
Slide 5: Creates a Combined Company with an Enhanced Ability to Serve Customers
Creates a Combined Company with an Enhanced Ability to Serve Customers Through Improved Scale and Expanded Service Capabilities • Greater resources to support and partner with the independent dealer channel and other resellers • Optimized product assortment of branded and private label products acro
Slide 6: Transaction Creates Value for Both Companies' Shareholders
6 Transaction Creates Value for Both Companies’ Shareholders 6 • $75M+ of annual run - rate cost synergies • $100M+ in working capital improvements Synergies • Stronger balance sheet with substantial liquidity • Reduced leverage profile (including synergies) Balance Sheet & Liquidity New Essendant o
Slide 7: Combination Creates a Stronger Platform with the Resources to Support and Invest in Our Customers
7 Combination Creates a Stronger Platform with the Resources to Support and Invest in Our Customers • Wholesale distributor of janitorial, foodservice and breakroom supplies, office products, technology products, automotive & industrial products, and office furniture • Distributes ~170,000 products
Slide 8: Significant Benefits to GPC Shareholders
8 Significant Benefits to GPC Shareholders Result of Comprehensive Efforts to Maximize Value for S.P. Richards • Participate in long term potential of combined Company through 51% ownership – S ignificant cost and working capital synergies – Enhanced ability to compete in intensely competitive $100B
Slide 9: Better Positions Essendant in the Evolving Business Products Marketplace
9 Better Positions Essendant in the Evolving Business Products Marketplace
Slide 10: Transaction Further Enhances Essendant's Strategy
10 Transaction Further Enhances Essendant’s Strategy Improve efficiency across the distribution network and reduce the cost base • Enhances efforts to optimize the supply chain and realize $50M+ in previously announced cost savings • Creates an additional $75M+ in run - rate cost synergies , and $10
Slide 11: Transaction Details Summary
11 Transaction Details Summary Transaction Structure Essendant to combine with GPC’s Business Products business (“S.P. Richards”) via a Reverse Morris Trust structure that is expected to be tax - free to shareholders of GPC and Essendant Transaction implies a valuation of S.P. Richards of approx
Slide 12: Attractive Cost and Net Working Capital Synergy Opportunity
12 Attractive Cost and Net Working Capital Synergy Opportunity • 90% of run - rate cost synergies expected to be realized by year 2 • Expected one - time cash costs of less than ~$50M • Clearly identified pathway to synergy realization • Combined integration team to be established $75M + e xpected r
Slide 13: Enhanced Financial Profile
$121M Standalone Pro Forma $300M+ ~$5B ~$7B Standalone Pro Forma 13 Enhanced Financial Profile 2017 Net Sales 2017 Adj. EBITDA (% Margin) • Creates a $7B pro forma company with significant scale • Drives improved margin profile through cost savings and superior cash flow profile • Delivers additiona
Slide 14: Greater Balance Sheet Flexibility
14 Greater Balance Sheet Flexibility Net Leverage • Committed financing to fund S.P. Richards one - time special cash payments and refinance Essendant’s outstanding debt in connection with the transaction • Expected $ 1.4B ABL facility under single credit agreement with terms similar to Essendant’s
Slide 15: Significant Value Creation for All Stakeholders
15 Significant Value Creation for All Stakeholders For Customers Greater resources to support and partner with independent dealers and other resellers Ability to develop and offer innovative solutions in marketing, digital, and analytics Expanded and optimized assortment of branded and private