AMA Group has agreed to sell its vehicle repair business to global private equity asset manager, Blackstone, for $508 million.
The group has entered into two transactions that will lead to the demerger of its automotive component, accessory and procurement business (ACAD) and the purchase of the remaining vehicle panel repair business by Blackstone. Both transactions are subject to approval by AMA shareholders.
AMA Group Directors unanimously recommend shareholders vote in favour of both transactions.
Under the first transaction, AMA will demerge its ACAD business into a new company to be listed on the Australian Securities Exchange. AMA Group shareholders will receive one share in the new ACAD company for each share they own in AMA Group. The AMA board expects ACAD will have an initial value per share of 32 to 36 cents, while the panel repair component is valued at 86 cents per share.
AMA Executive Chairman, Ray Malone, said the board has addressed the challenge of funding two growing but distinct businesses by separating ACAD in to a new ASX listed company.
“This separation will ensure that neither business has its prospects limited by the competing demands of the other business for board and management attention and financial resources. Each business will be able to realise its full potential with significant benefits to customers, employees and shareholders,” he said.
AMA Group Vehicle Panel Repair CEO, Andrew Hopkins, who will continue as CEO of the Panel Business after he acquisition by Blackstone, said “Over the past two years, we have rapidly grown our vehicle panel repair operations to over 100 sites and in the process changed the way the industry engages with its primary customers, the insurance companies, to the ultimate benefit of their customers, the policyholders. Taking the business private will increase our senior management team’s focus and allow us to further improve our cost competitiveness; in the process, strengthening our insurer customer relationships. Throughout the due diligence period we have been very impressed by Blackstone’s level of understanding of our business and their willingness to embrace our plans for growing and improving the operations. We are excited about them partnering with us for the next stage of our development.”
Blackstone Managing Director, Jonathan Chamberlain, said “We are excited about investing in Australia’s leading panel repair network, and to be partnering with Andrew Hopkins and the management team. As the owners of one of the leading panel repair businesses in the United States, Service King, Blackstone understands the industry and the opportunities and challenges ahead for the business.”