Quadrant makes partial exit via Australia car dealership IPO

Peter Warren sold 89.7 million shares for A$2.90, according to a prospectus. The pricing translated into an enterprise valuation of A$483 million and a 2021 earnings multiple of 8.8x. Quadrant offloaded 11.2 million shares, realizing proceeds of A$32.5 million and reducing its holding from 48.9% to 9.4%. Its remaining position is valued at approximately A$45.5 million.

The stock ended April 28 on A$3.56, a 22.7% premium to the IPO price. It fell back slightly the following day to close at A$3.51.

The private equity firm invested an undisclosed sum in Peter Warren in 2016 via Quadrant Private Equity No. 5 – its fifth fund as an independent entity and eighth overall – which closed at A$980 million the same year. The vehicle’s typical targets were companies with enterprise values of A$100-500 million.

Peter Warren was established in 1958 by entrepreneur of the same name and the Warren family remains the principal shareholder. The family bought additional shares as part of the IPO, maintaining its ownership at approximately 35%. Paul Warren, the founder’s eldest son, serves as an executive director.

At the time of Quadrant’s investment, the company had a staff of 1,100 selling 22 car brands across nine retail locations in Sydney and Queensland. In addition to bolstering the senior management ranks, the private equity firm supported inorganic expansion. Notably, Peter Warren merged with James Frizelle’s Automotive Group in 2017. The Frizelle family is the third-largest shareholder with 6.1%.

Peter Warren now operates 30 franchises across eight locations in Sydney and a further 40 across nine locations in Queensland and New South Wales. It sells new and used vehicles under 27 different brands, with a focus on prestige and luxury segments, as well as providing parts and accessories, vehicle financing, and various maintenance and warranty services.

Revenue reached A$1.39 billion in the 12 months ended June 2020, down from A$1.42 billion the previous year. Over the same period, EBTIDA increased from A$54.4 million to A$65.6 million and the company swung from a net loss of A$400,000 to a profit of A$8.9 million.

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• Topics
• Australasia
• IPO
• Consumer
• Australia
• Quadrant Private Equity
• automobiles