Deal focus: Navis leaves its mark on auto services

Philip Latham has been involved with WorldMark Group in some capacity for all but three of the past 18 years. During this period, the company has risen from a small-time existence in Perth to become one of the leading players in Australia's after-market car services industry. WorldMark has also gone through three phases of PE investment; new owner Quadrant Private Equity will take it into a fourth.

In 1999, WorldMark was the second acquisition made by RMB Capital Partners, which Latham had founded a year earlier, at a cost of $19.9 million. The company's franchise workshops - which added accessories to vehicles for dealerships - were sold off and it became a supplier and broker, providing products to the workshops and managing the service relationships with dealers. WorldMark also bought Motor One, which had a stronger presence in eastern Australia, to become a national player.

RMB sold the company to South Africa's WesBank in 2004 for $72 million, although Latham remained on the board for a further three years. He joined Navis Capital Partners in 2008. When WesBank decided to withdraw from Australia, RMB was able to re-invest, but Latham continued to track the asset and moved in for a full acquisition. "[WesBank] wanted to use the business to launch lease finance products in Australia and it wasn't the right vehicle for them to do that," he says. "I knew they'd had this orphan asset for a few years, so I made an offer and in 2010 Navis bought it."

WorldMark has achieved up to 80% penetration of Australia's 1,600 new and used dealerships and now sells window tint, accessories and protection for paintwork and internal fabrics used in approximately 25% of all new cars sold in Australia. Navis entered new product segments, such as Bluetooth in-car electronics and insurance services, and added new sales channels - for example, deals were reached with local fleet companies so that WorldMark products were sold alongside vehicle leasing services.

"We also started offering scratch and dent repair club membership: you pay a few hundred dollars when you buy the car and then you get it fixed at the curb every time you get a scratch, dent or stone chip for $50 a time," says Latham. "That has been phenomenally successful."

While the B2B and B2C after-sales services are concentrated on Australia and New Zealand, WorldMark developed an international automotive retail training, dealer process improvement and outsourcing enterprise division. This business, known as Sewells Group, was sold to MXI International in March, paving the way for the sale of the other assets to Quadrant. Navis paid $110 million for WorldMark and the two-stage exit will generate proceeds of more than $300 million.

"The business is likely to be valuable to trade buyers that want to use its relationships with dealerships to sell their own products. I also think it is approaching the scale where you could consider an IPO," Latham adds.

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• Topics
• Australasia
• Trade sale
• Consumer
• Support services
• Australia
• Exit
• Navis Management
• Quadrant Private Equity
• automobiles