AutoZone Inc., a rapidly expanding car parts chain with more than 2,000 stores, said Monday that it will acquire Chief Auto Parts Inc., the largest auto parts chain in Southern California, for about $280 million in cash and debt assumption.
The deal, subject to regulatory approval, would create a chain with about $3.2 billion in annual sales through 2,600 stores in 38 states.
Chief, founded in Norwalk in 1955, moved its headquarters to Dallas 20 years ago. It is owned by a unit of Los Angeles-based Trust Co. of the West.
The deal with AutoZone is part of a consolidation trend sweeping the auto industry. But whereas car makers such as Chrysler Corp. and Germany's Daimler-Benz are just starting on a round of marriages, parts retailers and wholesalers have been merging into ever-growing operations for most of the last decade.
The $19-billion-a-year retail car parts industry is stagnant, but big chains such as AutoZone and Pep Boys have been gaining market share by gobbling up the thousands of independent stores that once dominated the industry.
Most chains are pushing into the still-growing wholesale parts market--supplying professional auto repairers.
Chief, which recently launched a wholesale subsidiary, had been planning a public offering to retire debt and raise funds for a growth spurt of its own. Its April 24 notice of the potential stock sale put the company into play, triggering the bid by publicly traded AutoZone.
Terms of the deal call for AutoZone to pay about $75 million cash and to assume $205 million of Chief's long-term debt.
The deal with Chief was announced after the market closed. AutoZone's shares rose 6 cents to close at $29.63 on the New York Stock Exchange.