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Baupost boosts stake in Genuine Parts ahead of planned split
Genuine Parts is preparing to separate its Global Automotive and Global Industrial units, and Baupost increased its GPC position by 89% in Q2.
Value investor Seth Klarman's Baupost Group raised its stake in Genuine Parts Company as the auto parts retailer moves toward a corporate split. Yahoo Finance reports that Baupost increased its position in GPC by 89% in the second quarter, ending June with 2.82 million shares valued at about $332.3 million, based on its latest portfolio disclosure.
Genuine Parts earlier said it plans to separate its Global Automotive and Global Industrial businesses to increase focus and shareholder value. The source reports that bulls see potential for the two units to be worth more as standalone companies, with the Industrial segment currently viewed as the stronger performer.
In the second quarter, Industrial sales rose about 7% year over year and EBITDA grew nearly 10% to $316 million, while EBITDA margin expanded 30 basis points to 13.1%, Yahoo Finance wrote. The company also reported core maintenance, repair and operations sales up about 7% and project-based sales up roughly 9%, with growth in 11 of 14 industrial end markets.
On the Automotive side, Genuine Parts operates NAPA and has distribution and an independent-store network, according to the report. Yahoo Finance added that in North America, Automotive sales increased about 4% in the quarter and comparable sales rose 2.6%, with management pursuing efforts to improve the economics of the independent-store network across sales, pricing, inventory, operations, and technology.