Advanced Auto Parts shares rise as Carlyle agrees to buy its Worldpac unit via Investing.com

The Carlyle Group (NASDAQ:) Inc. acquires Worldpac, a unit of Advance Auto Parts (NYSE: ) for $1.5 billion, the companies announced Thursday.

AAP shares rose 5 percent in premarket trading.

Advance Auto Parts has faced pressure from shareholder activists to sell Worldpac to boost compensation and better compete with AutoZone Inc. and O’Reilly Automotive Inc. In November, Advance Auto Parts announced its intention to sell Worldpac, along with its Canadian business under the Carquest brand.

Worldpac, an original equipment parts distributor, is poised to benefit from the deal as vehicles become more complex and older cars continue to rack up mileage.

“We are pleased to announce the sale of the Worldpac business,” said Shane O’Kelly, President and CEO.

“The proceeds from the transaction will provide greater financial flexibility as we continue our strategic and operational review to improve the productivity of the company’s remaining assets and better position the company for future growth and value creation.

Worldpac generated about $2.1 billion in revenue for the 12 months ended June 30, according to a statement reviewed by Bloomberg News.

The acquisition, first reported by Bloomberg News, marks Carlyle’s first significant industrial investment in more than two years.

Over the past two decades, Carlyle has invested around $13 billion in industrial divers, including companies such as Nouryon, Axalta, Atotech, Signode and Allison Transmission. One of Carlyle’s most recent deals in the sector was its 2022 investment in Duravant, a maker of food processing and packaging equipment.

Last week, Carlyle also announced a $3.8 billion deal to acquire Baxter International Inc.’s kidney care business.

Advance Auto Parts stock has struggled in 2024, adding just 1.5% year-to-date. Shares have fallen 28% since March 21, leaving the Raleigh, North Carolina-based company with a market value of about $3.7 billion.