-Genuine Parts names 2 new directors after Elliott takes stake

By Svea Herbst-Bayliss

NEW YORK, Sept 4 (Reuters) - Automotive and industrial parts distributor Genuine Parts Company GPC.N, which operates the NAPA Auto Parts stores and Motion Industries, has reached a settlement with activist investor Elliott Investment Management to add two new directors to its board.

Atlanta-headquartered Genuine Parts and West Palm Beach, Florida-headquartered Elliott have been holding talks since the investment firm made a more than $1 billion bet on the company and became its largest active shareholder, the two sides said on Thursday, confirming an earlier report by Reuters.

Elliott partner Marc Steinberg led the engagement.

The new directors will bring expertise in industrial distribution and technology leadership at a time the company is undergoing a strategic and operational review to improve profitability and boost the share price, the sources said. The company and investor also reached an information-sharing agreement that will allow for continued dialogue between Elliott and Genuine Parts.

Details about the review and Genuine Parts' future plans will likely be announced and discussed at an investor day the company expects to hold next year.

The review is not aimed at evaluating the sale of the company but rather to find ways to boost operational performance and profitability.

"We will continue to evaluate and pursue opportunities that enhance operational performance, improve profitability and unlock shareholder value," Genuine Parts CEO Will Stengel said in a statement.

Founded in 1928, Genuine Parts now has a market value of roughly $19 billion as its Automotive Parts Group distributes replacement parts around the world, primarily under the NAPA brand name. Its Motion Industries business provides highly engineered parts and services to manufacturing and industrial industries primarily in the United States.

The stock price climbed 2% on Thursday, boosted by the news. Since January, it has gained almost 20% but is still seen as undervalued compared with both its automotive competitors like AutoZone AZO.N and O'Reilly Automotive ORLY.O and its industrial distribution competitors like Fastenal FAST.O, Grainger GRI.L and Applied Industrial Technologies AIT.N.

"We believe the company's current share price does not reflect the true value of its automotive aftermarket and industrial distribution businesses, and that there is a clear path to creating substantial, long-term value" at Genuine Parts, Steinberg said in a statement.

Courtney Carruthers, who previously served as president and CEO of TricorBraun, a B2B global packaging distributor, and in executive leadership roles at Grainger, and Matt Carey, who served as chief information officer at Home Depot HD.N, will join the board as independent directors on Thursday.

They will replace Robert Loudermilk and John Holder, who are retiring. The board will have 12 directors.

Over the last 16 months five newcomers have joined the board and six directors have retired.

Elliott, one of the world's busiest and largest activist investors with roughly $76 billion in assets, announced an investment in PepsiCo PEP.O earlier this week, and has invested in the industrial space including at Honeywell HON.O and Howmet Aerospace HWM.N.

It also reached similar agreements at medical-device maker Medtronic MDT.N and pharmaceutical company Charles River Laboratories CRL.N without its investments being made public before agreements were reached.