The parent company of MRO and industrial technology distributor Motion disclosed Thursday that it has reached an agreement with a leading activist investor after the firm acquired a reported $1 billion stake in the company.
The stake reportedly made Elliott Investment Management the largest active shareholder in Genuine Parts Company, which includes both Motion and the NAPA auto supply business.
The deal includes an “information-sharing agreement” that would allow for “an ongoing dialogue" between the firm and the supplier. Reuters reported that GPC and Elliott are in the midst of a review of the company’s operations and strategy that aims to improve its profits and share prices.
That review is not evaluating a potential sale of the company.
As part of the agreement, GPC named TricorBraun Vice Chair Court Carruthers and former Home Depot Executive Vice President Matt Carey to its board of directors effective Thursday. Carruthers recently retired after eight years as CEO of the packaging distributor, and previously served in executive leadership roles at Grainger, while Carey had retired from the home improvement retail giant as its EVP, customer experience and chief information officer. Carey had previously held roles at eBay and Walmart, as well.
The new members will succeed departing directors Robin Loudermilk and John R. Holder — and bring experience in both the distribution sector and in technological advancement to the panel, a source told Reuters.
"As one of GPC's largest investors, we believe the new additions to the board and the ongoing strategic and operational review represent critical steps toward ensuring that GPC reaches its full potential,” Elliott Partner Marc Steinberg said in a statement from the company. “We believe the company's current share price does not reflect the true value of its automotive aftermarket and industrial distribution businesses, and that there is a clear path to creating substantial, long-term value at GPC.
"We look forward to continuing our constructive engagement with Will Stengel and the board as GPC enters this next phase of value creation."
"This past year has been pivotal for GPC – we have moved with discipline and speed to advance our strategic initiatives despite a dynamic environment,” said Stengel, the company’s president and CEO. “We will continue to evaluate and pursue opportunities that enhance operational performance, improve profitability and unlock shareholder value.”
The company is expected to hold an investor event next year that would outline both the results of the review and its future plans, Reuters reported.
Motion is the no. 2 distributor on ID's most recent Big 50 list.
