Two leading truck aftermarket parts suppliers are joining forces, and two truck aftermarket parts suppliers are combining into one, with FleetPride and TruckPro joining forces.
The combined company will be branded FleetPride. In its announcement of the deal in late October, the company said the combined parts supplier “will deliver increased value to its customers through greater parts availability, deeper technical expertise, best-in-class service and an enhanced e-commerce experience.”
A FleetPride spokeswoman described the two companies as “very similar and complementary.” “Our branches and stores serve B2B and B2C customers while our service points provide customers with heavy-duty truck service and maintenance,” she said.
The merger between the two companies comes several months after rating agency Moody’s downgraded the family of companies’ rating for FleetPride by one notch to Caa1. He also kept the company’s outlook negative and criticized the company’s management in his report.
Moody’s said of FleetPride that “despite efforts to improve operating results, the company will continue to operate with very high leverage, low interest coverage and low liquidity attributed to persistent negative free cash flow.”
He also said FleetPride was facing “imminent debt maturities which, if not addressed in time, will result in an unsustainable capital structure.”
But that’s no longer a problem. The debt which concerned Moody’s was repaid, following Moody’s announcement of the withdrawal of its rating on the company.
S&P Global Ratings made the same move. But the B- rating on a series of outstanding debts at FleetPride was higher than the Caa1 Corporate Family rating at Moody’s. S&P Global had a stable outlook on the company, stronger than Moody’s negative outlook.
S&P Global’s B- rating is six times below the dividing line between investment grade and non-investment grade debt. The Caa1 rating is seven notches below this cutoff line.
When the transaction was announced in late October, no sales price or figures for the combined value of the new entity were provided. Both companies were owned by private equity funds: American Securities’ FleetPride and Platinum Equity’s TruckPro.
Chairman of the combined company will be Tom Greco, the former CEO of Advance Auto Parts (NYSE: AAP) who joined FleetPride as CEO in July. In a prepared statement announcing the deal, the combined companies also said that Chuck Broadus, who currently serves as president and CEO of TruckPro, will continue to lead that company as it seeks to integrate the two now-merged companies.
