Two leading truck parts suppliers are merging, and two truck parts suppliers are combining into one, with FleetPride and TruckPro joining forces.
The combined company will carry the FleetPride name. In its announcement of the deal in late October, the company said the combination parts supplier “will offer enhanced 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 locations offer heavy truck service and maintenance to customers for their trucks,” he said.
The merger between the two companies comes several months after debt rating agency Moody’s lowered FleetPride’s corporate family rating by one notch to Caa1. He also kept the outlook for the company 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 weak liquidity attributed to ongoing negative free cash flow.”
He also said FleetPride was facing “imminent debt maturities that, if not addressed in a timely manner, will result in an unsustainable capital structure.”
But that is no longer a problem. The debt owing to Moody’s has been repaid, according to Moody’s announcement to withdraw the company’s rating.
S&P Global Ratings did the same. But FleetPride’s B- rating on a number of outstanding debt was higher than Moody’s Caa1 corporate family rating. S&P Global had a stable outlook for the company, stronger than Moody’s negative outlook.
S&P Global’s B- rating is six ratings below the dividing line between investment grade debt and non-investment grade debt. The Caa1 rating is seven levels below that cut-off line.
In the announcement of the transaction in late October, no sales price or figure on the combined value of the new entity was provided. Both companies were owned by private equity: American Securities’ FleetPride and Platinum Equity’s TruckPro.
President of the combined company will be Tom Greco, 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 is currently president and CEO of TruckPro, will continue to lead that company as it seeks to integrate the two now-combined firms.