CPE sells Australia used car business to Japan's Sojitz
CPE Capital has sold part of Dutton Group, an Australia-based used car dealer it has owned since 2016, to Japan’s Sojitz Corporation for an undisclosed sum.
Sojitz, which has interests spanning automotive, aerospace, infrastructure, minerals, chemicals, and consumer, said in a filing that it “acquired full ownership of Albert Automotive Holdings, which operates a wholesale and retail used car business as part of Dutton Group.” According to a source close to the situation, CPE has made a full exit.
The private equity firm bought a 50% interest in Dutton at a valuation of AUD 130m (USD 96m) via its fourth fund, which closed on AUD 735m in 2017. It is the latest in a string of exits from that vehicle, including crackers and biscuits producer Gourmet Food Holdings (GFH) and ferry and logistics operator StraitNZ. Those sales, completed in 2021 and 2022, respectively, generated returns of 5.3x and 7.6x.
CPE is currently deploying its fifth fund, which is said to have closed last year on AUD 780m.
Founded in 1911 when Albert Octavius Dutton began building horse-drawn carriages, Dutton claims to be Australia’s largest national used car wholesaler dealing in general, prestige and luxury cars. According to CPE’s website, the company transacts more than 25,000 vehicles per annum through retail and wholesale channels. A separate subsidiary provides car financing and insurance.
Sojitz said that Dutton has partnerships with around 800 third-party dealerships, enabling it to run what are effectively B2B auctions. The company expanded from wholesale into retail in 2017 and currently operates 24 outlets. These include rare luxury car specialist Dutton Garage and 16 Dutton One establishments, which focus on premium brand vehicles.
The automotive division accounted for JPY 55.4bn (USD 403m) of Sojitz’s JPY 337.6bn in gross profit for the 12 months ended March 2021. Its wholesale and retail distribution footprint encompasses markets like the US, Brazil, Argentina, Thailand, the Philippines, Pakistan, Russia, and Ukraine, as well as Japan. The company mostly sells new cars, but it is looking to expand in the used vehicle space.
“While Australia is considered a matured market with a high percentage of car ownership, the country’s economic and population growth are expected to drive automobile demand. Australia also has a huge demand for used cars based on the fact that all new cars sold in the country are imported, and the average age of vehicles across the country is high,” Sojitz said.
The company’s medium-term management plan calls for an expansion of the scope of the automotive sales business. This includes enhancing locally based sales and marketing capabilities and after-sales services.
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