Paccar said today it has agreed to sell its retail automotive parts and accessories businesses to rival CSK Auto of Phoenix for $143.2 million in cash so it can focus on truck sales.
CSK, which owns and operates 926 stores in 17 Western states, including Schuck's, Checker, Kravben and Big Wheel/Rossi, will acquire Paccar's subsidiary that operates 192 stores under the trade names of Al's Auto Supply and Grand Auto Supply in Washington, California, Idaho, Oregon, Nevada and Alaska.
The Paccar stores produced sales of about $225 million during the past 12 months.
The deal is expected to close in late October. Proceeds from the sale will be used to accelerate introduction of new truck designs, to expand financial-services companies in North America and Europe, and to fund new technology ventures, said Mark Pigott, Paccar chairman and chief executive.
Analysts were surprised by the announcement but praised the move.
"Paccar's auto-supply business was small, but a good operation," said Peter Jacobs, with Ragen MacKenzie in Seattle.
John Rogers of D.A. Davidson in Portland said it's probably a good thing for the company to focus on its core heavy-duty truck business.
"It can apply the cash to areas that will generate more attractive returns," he said.
The growing Bellevue company is increasing its share of the Class 5-7 truck market in North America. Pigott said a recently opened plant in Montreal is expected to help the company meet strong
demand for the products, which include Kenworth, Peterbilt, DAF and Foden trucks.
Pigott said Paccar Financial has more than 90,000 trucks in its portfolio and is developing new finance programs for customers in Europe. It also is embarking on technology investments concentrated in electronic communication in vehicles, material sciences applicable to truck-cab designs and e-commerce, particularly in the financial-services area.
"There is significant potential for Paccar to extend its position as the leader in the commercial-vehicles industry by offering innovative solutions to our customers' transportation requirements," Pigott said.
The company already produces more than 105,000 trucks annually. In July, it reported record first-half sales of $4.2 billion and a record profit of $259 million. The company also manufactures industrial winches.
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