Two leading suppliers of aftermarket parts for trucks are combining, with two aftermarket truck parts suppliers combining into one, with FleetPride and TruckPro joining forces.
The combined company will be branded under the FleetPride name. In its late October announcement of the deal, the company said the combined parts supplier will “deliver enhanced value to its customers through greater parts availability, deeper technical expertise, best-in-class service and an enhanced ecommerce experience.”
A spokeswoman for FleetPride described the two businesses as “very similar and complementary.” “Our branch and store locations serve B2B and B2C customers while our service locations offer heavy duty truck service and maintenance to customers for their trucks,” she said.
The merger between the two companies comes several months after debt rating agency Moody’s cut the corporate family grade for FleetPride by one notch, to Caa1. It also kept the outlook on the company at negative and in its report criticized company management.
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.”
It also said FleetPride faced “looming debt maturities that if not addressed timely will result in an untenable capital structure.”
But that is no longer an issue. The debt that concerned Moody’s has been repaid, according to Moody’s announcement that it was withdrawing its rating on the company.
S&P Global Ratings made the same move. But the B- rating on one series of outstanding debt 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 the negative outlook at Moody’s.
The B- rating at S&P Global is six ratings below the dividing line between investment grade and non-investment grade debt. The Caa1 rating is seven notches below that cut line.
In the late October announcement of the transaction, no sales price or a figure on the combined value of the new entity was provided. Both companies were owned by private equity: FleetPride by American Securities and TruckPro by Platinum Equity.
The president of the combined company will be Tom Greco, the former Advance Auto Parts (NYSE: AAP) CEO who joined FleetPride as CEO in July. In a prepared statement announcing the deal, the combined companies also said Chuck Broadus, who is currently TruckPro president and CEO, will continue to head up that company as it looks to integrate the two now combined firms.