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FORM 8-K ---------------------------
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 30, 2001
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Advance Auto Parts, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 001-16797 54-2049910
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
5673 Airport Road, Roanoke, Virginia 24012
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (540) 362-4911
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________________________________________________________________________________
(Former name or former address, if changed since last report.)
INFORMATION TO BE INCLUDED IN THE REPORT
Item 2. Acquisition or Disposition of Assets.
On November 28, 2001, Advance Auto Parts, Inc., a Delaware corporation
("Advance Auto Parts"), completed its acquisition of Discount Auto Parts, Inc.,
a Florida corporation ("Discount"). Pursuant to an Agreement and Plan of Merger
(the "Merger Agreement") dated as of August 7, 2001 among Advance Auto Parts,
Advance Holding Corporation, a Virginia corporation ("Advance Holding"), AAP
Acquisition Corporation, a Florida corporation and a wholly-owned subsidiary of
Advance Auto Parts ("Merger Sub"), Advance Stores Company, Incorporated, a
Virginia Corporation ("ASCI"), and Discount, Merger Sub merged (the "Merger")
with and into Discount, with Discount continuing as the surviving corporation
and a wholly-owned subsidiary of Advance Auto Parts, and each issued and
outstanding share of Discount common stock was converted into and represented
the right to receive 0.2577 of a share of Advance Auto Parts common stock and
$7.50 in cash. Advance Auto Parts will not issue fractional shares in the
Merger. Instead, Advance Auto Parts paid or will pay cash in an amount
determined by multiplying the fraction of a share of Advance Auto Parts common
stock to which a person is entitled by $29.11.
As a result of the Merger, (a) the former holders of Discount
common stock are entitled to receive approximately 4,309,970 shares of common
stock of Advance Auto Parts and $125,435,670 in cash, (b) the former holders of
options to purchase Discount common stock with a per share exercise price less
than $15.00 are entitled to receive an aggregate of $3,043,150 in cash, and (c)
the former holders of options to purchase Discount common stock with a per share
exercise price equal to or greater than $15.00 are entitled to receive options
to purchase 574,765 shares of Advance Auto Parts common stock under the Advance
Auto Parts 2001 Executive Stock Option Plan. Adjustments for fractional shares
and payments in cash in lieu thereof is to be made by Advance Auto Parts upon
receipt from holders of Discount common stock of properly executed letters of
transmittal.
Concurrently with the consummation of the Merger, Advance Holding merged
with and into Advance Auto Parts, with Advance Auto Parts continuing as the
surviving corporation, pursuant to an Agreement and Plan of Merger dated as of
August 7, 2001 (the "Reincorporation Merger Agreement") between Advance Holding
and Advance Auto Parts, and each issued and outstanding share of Advance
Holding Class A common stock was automatically converted into the right to
receive one share of Advance Auto Parts common stock.
Immediately following the closing of the Merger, Advance Auto Parts
contributed 100% of the stock of Discount to ASCI, and Discount became a
wholly-owned subsidiary of ASCI.
As a result of the Merger, Advance Auto Parts became a public company and
the common stock of Advance Auto Parts became listed for trading on the New York
Stock Exchange.
The Merger was funded with (a) the net proceeds of approximately $185.6
million from the sale by ASCI of its 10-1/4% Senior Subordinated Notes due 2008
(the "Notes"), and (b) $485 million in term loans, consisting of a $180 million
Tranche A Term Loan facility with a maturity of five years and a $305 million
Tranche B Term Loan facility with a maturity of six years (collectively, the
"New Credit Facility"), pursuant to a Credit Agreement dated as of November 28,
2001 among ASCI, JP Morgan Chase Bank ("Chase") and certain financial
institutions.
Immediately following the closing of the Merger and the contribution
by Advance Auto Parts to ASCI of the Discount common stock, ASCI prepaid the
principal and accrued interest outstanding, and where applicable LIBOR break
fees or make-whole premiums, under (a) the Credit Agreement dated as of April
15, 1998, as amended and restated as of October 19, 1998, and as amended, among
Advance Holding, ASCI, the lenders party thereto and Chase, as administrative
agent; (b) the Revolving Credit Agreement dated as of July 29, 1999, as amended,
among Discount, SunTrust Bank ("SunTrust") and the other parties thereto; (c)
Discount's 7.46% Senior Notes Due July 15, 2007; and (d) Discount's 9.80% Senior
Secured Notes Due May 31, 2003.
In addition, immediately following the closing of the Merger and the
contribution by Advance Auto Parts to ASCI of the Discount common stock, ASCI
paid, on behalf of Discount Auto Parts Distribution Center, Inc. ("DAP
Distribution Center"), all amounts payable as the purchase price (the "Synthetic
Lease Purchase Price Obligation") pursuant to the election by DAP Distribution
Center to acquire the Gallman, Mississippi property which was the subject of a
Master Agreement dated as of May 30, 2000 among Discount, DAP Distribution
Center, Atlantic Financial Group, Ltd., SunTrust and the other signatories
thereto and the Master Lease Agreement dated as of May 30, 2000 among Discount,
DAP Distribution Center, Atlantic Financial Group, Ltd., SunTrust and the other
signatories thereto, which payment of such purchase price (a) was used to
satisfy the indebtedness owing by Atlantic Financial Group, Ltd., Discount and
DAP Distribution Center to SunTrust, and (b) was deemed to satisfy the
indebtedness owing under the Mississippi Business Finance Corporation Industrial
Development Bonds, Series 2000 (Atlantic Financial Group, Ltd. Project).
Contemporaneously with the payment of the Synthetic Lease Purchase Price
Obligation, title to the Gallman, Mississippi property was conveyed to Discount
by Atlantic Financial Group, Ltd.
The consideration payable pursuant to and other terms of the Merger
were determined by "arms length" negotiations among the parties to the Merger
Agreement.
Discount is one of the Southeast's leading speciality retailers and
suppliers of automotive replacement parts, maintenance items and accessories to
both do-it-yourself consumers and professional mechanics and service
technicians, based on store count. Discount currently operates 671 stores
located throughout Florida, Georgia, Mississippi, Alabama, Louisiana and South
Carolina. Advance Auto Parts intends to continue the business operations
conducted and intended to be conducted by Discount. Advance Auto Parts intends
to convert Discount's stores outside Florida to the Advance Auto Parts banner
within the next year. Advance Auto Parts intends to convert Discount's stores in
Florida to the Advance Auto Parts banner over the next four years.
A copy of the press release announcing the closing of the Discount
acquisition is filed as Exhibit 99.1 to this Form 8-K.
The descriptions of the Merger Agreement and the Reincorporation
Merger Agreement set forth herein do not purport to be complete and are
qualified in their entirety by the provisions of the Merger Agreement and the
Reincorporation Merger Agreement, each which is incorporated by reference as an
exhibit hereto.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
Audited Consolidated Financial Statements of Discount as of May
29, 2001 and May 30, 2000, and the related consolidated
statements of income, stockholders' equity and cash flows for
each of the three years in the period ended May 29, 2001, are
incorporated herein by reference to the Annual Report on Form
10-K of Discount for the fiscal year ended May 29, 2001, as
filed with the Securities and Exchange Commission.
Unaudited Consolidated Financial Statements of Discount as of
August 28, 2001 and the related consolidated statements of
income, stockholders' equity and cash flows for the thirteen
weeks ended August 28, 2001 and August 29, 2000, are
incorporated herein by reference to the Quarterly Report on
Form 10-Q of Discount for the quarterly period ended August 28,
2001, as filed with the Securities and Exchange Commission.
(b) Pro Forma Financial Information.
The pro forma financial information required to be filed as
part of this report is attached hereto as Exhibit 99.4.
(c) Exhibits.
See Exhibit Index on page following signatures.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ADVANCE AUTO PARTS, INC.
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(Registrant)
Date November 30, 2001 /s/ Jimmie L. Wade
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(Signature)*
Jimmie L. Wade
President and Chief Financial Officer
*Print name and title of the signing officer under his signature.
EXHIBIT INDEX
Exhibit
Number Exhibit Description
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2.1(1) Agreement and Plan of Merger dated as of August 7, 2001 by and
among Advance Auto Parts, Inc., Advance Holding Corporation,
AAP Acquisition Corporation, Advance Stores Company,
Incorporated and Discount Auto Parts, Inc.
2.2(2) Agreement and Plan of Merger dated as of August 7, 2001 by and
between Advance Auto Parts, Inc. and Advance Holding
Corporation
23 Consent of Ernst & Young LLP
99.1 Press release of Advance Auto Parts, Inc. dated November 28,
2001
99.2(3) Audited Consolidated Financial Statements of Discount Auto
Parts, Inc. as of May 29, 2001 and May 30, 2000, and the
related consolidated statements of income, stockholders'
equity and cash flows for each of the three years in the
period ended May 29, 2001.
99.3(4) Unaudited Consolidated Financial Statements of Discount Auto
Parts, Inc. as of August 28, 2001 and the related consolidated
statements of income, stockholders' equity and cash flows for
the thirteen weeks ended August 28, 2001 and August 29, 2000.
99.4 Unaudited Pro Forma Financial Data, including (a) the
unaudited pro forma consolidated statement of operations data
for the twelve months ended October 6, 2001, the fiscal year
ended December 30, 2000 and the nine months ended October 6,
2001, and the notes thereto, and (b) the unaudited pro forma
balance sheet as of October 6, 2001, and the notes thereto.
(1) Incorporated by reference to Exhibit 2.3 to the
Registration Statement on Form S-4 of Advance Auto Parts,
Inc. (Registration No. 333-68858) filed with the
Securities and Exchange Commission by Advance Auto Parts,
Inc. on August 31, 2001.
(2) Incorporated by reference to Exhibit 2.4 to the
Registration Statement on Form S-4 of Advance Auto Parts,
Inc. (Registration No. 333-68858) filed with the
Securities and Exchange Commission by Advance Auto Parts,
Inc. on August 31, 2001.
(3) Incorporated by reference to the Annual Report on Form
10-K of Discount Auto Parts, Inc. for the fiscal year
ended May 29, 2001 (Commission File No. 1-11276) filed
with the Securities and Exchange Commission by Discount
Auto Parts, Inc. on August 24, 2001.
(4) Incorporated by reference to the Quarterly Report on Form
10-Q/A of Discount Auto Parts, Inc. for the quarter ended
August 28, 2001 (Commission File No. 1-11276) filed with
the Securities and Exchange Commission by Discount Auto
Parts, Inc. on November 6, 2001.