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AMA to spin off component arm, agrees AUD 500mn+ sale of panel repair unit
Posted on Friday, 13 April 2018 09:31
Australian car aftercare firm AMA Group has announced plans to organise its portfolio, which includes agreeing to demerge its automotive component accessory and procurement (ACAP) business into a separate Australian Securities Exchange-listed company. In addition, the firm has also signed off a AUD 508.00 million (USD 393.89 million) transaction to offload its vehicle panel repair assets to global private equity firm Blackstone. If both deals are implemented, AMA shareholders will receive stocks in the newly-listed business on a one-for-one basis and 80.00 cents in value for their shares in the panel repair operations in a choice of cash or a mix of cash and unlisted scrip consideration. The company has said both transactions remain subject to the approval of its investors. AMA’s component assets, known as the ACAD operations, is expected to have an initial value per share of between AUD 0.32 and AUD 0.36 apiece. The spin-off is expected to allow each business to adopt a capital structure that best supports its scale and strategic objectives, while enabling the new company to gain access to capital sources, furthering its growth opportunities. As part of the new ACAD group, the consumables and parts procurement function of the panel repair operations will be included, which has delivered significant cost savings for major customers in the car insurance market. Under terms of the Blackstone proposal, shareholders in AMA will have their stocks in the panel group acquired by the buyout firm for AUD 0.86 apiece, or 10.7x projected pro forma normalised earnings before interest, taxes, depreciation and amortisation for the year to 30th June 2018. Chief executive of the vehicle panel repair unit Andrew Hopkins, who will retain his role following completion, said in “the past two years, we have rapidly grown our vehicle panel repair operations to over 100 sites and in the process fundamentally changed the way the industry engages with its primary customers”. He added: “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.” © Zephus Ltd