Blackstone agrees $396m deal for Australian panel business

AMA shareholders can either sell their shares for A$0.86 apiece in cash or for a combination of cash and shares in the private equity firm’s acquisition vehicle, according to a filing. The mixed option is either 40% cash and 60% shares or 95% cash and 5% shares. Investors representing 28.7% of the overall shares on issue have indicated they will choose the mixed option.

Prior to completing the divestment, AMA will demerge its remaining automotive component, accessory and procurement (ACAD) business – which covers automotive electrical and cable accessories and automotive component remanufacturing – into a separate entity. This will be listed with an initial valuation of A$0.32-36 per share.

Under the terms of the Blackstone agreement, the panel business – led by existing CEO Andrew Hopkins – will continue to buy components from the ACAD business. It will pay A$12 million in product sourcing agency fees over a period of three years.

AMA, which has 93 locations nationwide, sees itself as the principal consolidator in a fragmented industry. It also partners with insurers to rollout greenfield sites backed by long-term contracts.

The panel business accounted for A$324.5 million out of AMA’s A$382.2 million in total revenue for the 12 months ended June 2017. Its contribution was A$212.1 million out of A$264.3 million the previous year. The company’s net profit increased 27.7% over the same period to reach A$20.6 million, while normalized EBITDA rose 28.7% to A$41.1 million.

Blackstone has previous experience in the panel business through its ownership in US-based Service King Collision Repair Centers. The private equity firm is in the process of raising $3 billion for its first dedicated Asia private equity fund. Past investments in the region – including a carve-out of the chemicals division of Australia-based Orica in 2014 – were made through its global funds.

AMA announced Blackstone had bid for the panel business on January 29, prompting a 6% jump in its share price to A$1.19. The stock closed at A$1.01 on April 13, giving the company a market capitalization of approximately A$530 million. The demerger and the divestment plan still require shareholder approval.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Australasia
• Buyouts
• Support services
• Australia
• The Blackstone Group
• automobiles