Carlyle, a global investment firm and former owner of Axalta Coating Systems, is set to buy Worldpac Inc., an OEM automotive parts wholesale distribution business, from Advance Auto Parts for $1.5 billion.

The cash transaction is slated to close before the end of the year, according to a joint news release from Advance and Carlyle. Advance expects net proceeds of $1.2 billion from the sale of Worldpac after taxes and transaction fees.

“We are pleased to announce the sale of the Worldpac business,” said Shane O’Kelly, Advance’s president and CEO, in the release. “The sale enables our team to sharpen their focus on decisive actions to turn around the Advance blended box business. Proceeds from the transaction will provide greater financial flexibility as we continue our strategic and operational review to improve the productivity of the company’s remaining assets and better position the company for future growth and value creation. On behalf of everyone at Advance, I would like to thank the more than 5,000 Worldpac team members for their dedication over the last 10 years.”

From the end of Q2 2023 to Q2 2024, Worldpac generated $2.1 billion in revenue and $100 million in EBITDA, according to the release.

Wes Bieligk, a Carlyle partner, and Katherine Barasch, a senior member of Carlyle’s Global Industrials investing team, said Worldpac is “a great business operating in attractive markets.”

“Our proven track record in executing complex carve-outs position us uniquely to support Worldpac and its team as an independent company.”

Carlyle has invested $13 billion in industrial carve-outs over the past two decades, including in Axalta, Nouryon, Atotech, Signode, and Allison Transmission, the release states.

Advance’s Q2 results, released in July, show the company recorded $2.7 billion in net sales, which was flat compared to Q2 2023.

The company’s gross profit decreased 2.3% to $1.1 billion and its gross profit margin was 41.5% compared to 42.5% in Q2 2023. A news release from Advance says this was primarily due to the company’s strategic pricing investments and higher product costs.

Operating income was $71.8 million, or 2.7% of net sales compared to 4.7% in Q2 2023.

Net cash provided by operating activities was $87.8 million through Q2 versus $167.1 million used in operating activities during the same period.

Editor’s note: This article was updated to state that Carlyle is the former owner of Axalta.

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