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Auto-Wares partners with PE firm Kinderhook, acquires Indiana auto parts distributor

BY Friday, March 17, 2023 03:41pm

GRAND RAPIDS — The parent company of Auto-Wares LLC, a distributor of aftermarket automotive parts to service centers and more than 200 company-owned stores in the Midwest, has secured an investment from Kinderhook Industries LLC, a New York City-based private equity firm.

The affiliated AWI Holdings LLC subsequently used the recapitalization, which involved investments from its management and Kinderhook Industries, to buy Lafayette Warehouse Inc., a warehouse distributor of OEM and aftermarket auto parts in North Central Indiana.

The Lafayette deal was the 83rd acquisition that Auto-Wares has closed since the company was founded in 1976. 

In recent years, the company in 2022 acquired Thirlby Automotive stores in Northern Michigan, eight Parts Pro locations in the greater Cleveland, Ohio area in 2021 and four retail automotive parts stores and their inventories in metro Detroit and Kalamazoo in 2020 from Kennesaw, Ga.-based Icahn Automotive Group LLC. Auto-Wares also operates the Auto Value Parts Stores chain.

In an announcement on the investment and Lafayette acquisition, Auto-Wares CEO Todd Leimenstoll called Kinderhook “the perfect partner to help Auto-Wares accelerate growth during this exciting new chapter.”

“Auto-Wares is confident that Kinderhook’s expertise, resources, and vision for future growth will allow our business to expand our operations and build upon our reputation as a leading warehouse distributor,” Leimenstoll said in a statement. “Our commitment to customer satisfaction remains at the forefront of our business strategy, and we look forward to continuing to grow alongside our loyal customer base.”

Terms of both deals were undisclosed.

Kinderhook Industries manages $5.4 billion in capital and focuses on middle market businesses with niche market positions in the health care services, environmental and business services, and automotive and light manufacturing. The Auto-Wares deal for Lafayette was Kinderhook’s 202nd transaction in the automotive and light manufacturing sectors.

“I knew from the start of this process that finding the right partner was critical to our long-term success, and I am confident that we have found the right partner in Kinderhook. The firm’s deep industry expertise and track record of success in the automotive sector was a major factor in Auto-Wares’ decision to partner with Kinderhook,” Auto-Wares founder Fred Bunting said in a statement. “Equally important was Kinderhook’s cultural fit with our own organization. We share a common vision for growth, customer service, and operational excellence. I’m excited about what we can achieve together, and I look forward to a bright future for our company.”

Kirkland & Ellis LLP served as legal counsel and Stifel served as buy-side financial adviser to Kinderhook on the transaction. Honigman LLP served as legal counsel to Auto-Wares for the deal for Lafayette Warehouse. Truist Bank led a debt syndicate including Union Bank, Fifth Third Bank, KeyBank, Stifel, and Regions Bank that provided financing for both transactions.

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