Tag Archive | "acquisitions"

VALEO COMPLETES FTE AUTOMOTIVE ACQUISITION

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VALEO COMPLETES FTE AUTOMOTIVE ACQUISITION


Parts maker Valeo has completed the acquisition of actuator firm FTE Automotive, having received clearances from the European Commission and the Turkish Competition Authority. All FTE employees will transfer to Valeo.

Valeo says that the acquisition will allow it to expand its offering of active hydraulic actuators, a fast-growing market that has benefited from the rise of hybrid and electric vehicles.

Jacques Aschenbroich, Valeo’s Chairman and Chief Executive Officer, said: “With the acquisition of FTE Automotive, Valeo is positioning itself as the technological leader on the actuators market and thereby consolidating its CO2 emissions reduction strategy. This acquisition will help strengthen Valeo’s Powertrain Systems business. We are happy to welcome FTE’s 3,800 employees to the Valeo Group.”

In 2016, FTE Automotive generated sales of around 550 million euros. The company has more than 3,800 employees and a diversified manufacturing footprint in eight countries, including Germany, the Czech Republic, Slovakia, Mexico and China.

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AUTOSUPPLIES ACQUIRES BUTLERS AUTOMOTIVE

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AUTOSUPPLIES ACQUIRES BUTLERS AUTOMOTIVE


Autosupplies Chesterfield Ltd has acquired Barnsley based motor factor Butlers Automotive with immediate effect.

The acquisition is the first of its kind for Autosupplies, having grown its head office and Bolsover branch to be one of the largest single branch motor factors in the UK, occupying a 40,000sqft site and employing more than 90 members of staff and managing a fleet of more than 50 delivery vehicles.

Butlers Automotive has been trading in Barnsley for more than 40 years, but in the past year has suffered setbacks with the tragic loss of both its owners Philip and Nicollette Parkin.

Tony Porter, Butlers Automotive Director, said: “To ensure the business continues to move forward, it needs to be under the stewardship of a vibrant business that understands the values of Butlers Automotive and that of its customers. We are delighted that family run business Autosupplies Chesterfield Ltd will be taking the business forward.”

David Clarke, Autosupplies Managing Director, said: “Firstly, I would like to pay tribute to Tony and the staff at Butlers Automotive for their professionalism and courage during a very difficult period.

“We are delighted to have secured Butlers Automotive’s future and can’t wait to get started. The name Butlers Automotive is highly regarded in Barnsley for its customer service and it is a name and brand that we are determined to grow. The business is founded on traditional values and this, coupled with the backing of the UK’s largest single branch motor factor in Autosupplies, means an exciting future ahead.”

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HAYNESPRO ACQUIRES E3 TECHNICAL

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HAYNESPRO ACQUIRES E3 TECHNICAL


Data solutions firm HaynesPro – a division of Haynes Publishing Group P.L.C, has announced the acquisition of Carweb’s e3 Technical business in order to strengthen its online presence. Full terms of the deal are yet to be confirmed.

The deal will see HaynesPro take control of the latter’s direct and indirect business which includes Repair and Maintenance Information (RMI), Vehicle Registration Mark (VRM) look-up software as well as its associated helpdesks and a number of Carweb’s employees. All customer contracts associated with the e3 Technical brand will also be transferred to the new owner.

“This acquisition is an important milestone in our European growth strategy and significantly enhances HaynesPro’s data offering”, said HaynesPro MD Peter van der Galiën, “Having worked with the E3 Technical team for many years, we know that we are bringing on board the best talent and capabilities in the industry.”

Darryl Watts, former e3 Technical Sales Director and new HaynesPro UK Managing Director, commented. “The acquisition reflects our strong commitment to providing UK partners and customers with the best possible technical data solutions. It also guarantees the continuity of existing services, without any interruptions during the hand-over, and ensures the development of future products to meet customer and partner needs.”

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BREAKING: THE PARTS ALLIANCE ACQUIRES BBC SUPERFACTORS

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BREAKING: THE PARTS ALLIANCE ACQUIRES BBC SUPERFACTORS


Business group The Parts Alliance has acquired long-term affiliate member BBC Superfactors.

The seven-branch chain was established thirty years ago by Gary Shulman and Peter Rostron and initially covered the Blackburn, Bury and Chorley areas, hence the name.

“Combining the dedication of our loyal staff team with the expertise of The Parts Alliance has proved to be a winning formula for us over several years,” said MD Gary Shulman.  “We’re excited to now strengthen this relationship to ensure our business continues to thrive long into the future.”

“Since joining The Parts Alliance in December 2012, BBC have posted consistent double-digit annual sales growth and have invested to achieve industry-leading service levels. We are very pleased to welcome our BBC colleagues in the team,” stated Peter Sephton, President and CEO, European Automotive Group.

File pic of team at Blackburn branch

“This acquisition strengthens our position in the UK market and underlines The Part Alliance’s capability of driving growth both organically and through acquisitions,” added Henry Buckley, President and CEO of the PA’s Canadian parent company, Uni-Select.

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CMA LATEST: CERTAIN ANDREW PAGE BRANCHES ‘DAMAGE COMPETITION’

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CMA LATEST: CERTAIN ANDREW PAGE BRANCHES ‘DAMAGE COMPETITION’


The Competition and Markets Authority (CMA) has provisionally found that the purchase by Euro Car Parts of much of the Andrew Page business could ‘damage competition in 10 local areas’.

Euro Car Parts bought most of Andrew Page in October 2016, after the latter went into administration. Following a complaint, a group of independent panel members at the Competition and Markets Authority (CMA) has investigated the merger. The group identified 10 local areas in England where the two companies were close competitors and where the merger could result in reduced competition for local customers, leading to higher prices or a lower quality of service.

The 10 areas mentioned in the draft are:

  • (a) Blackpool;
  • (b) Brighton;
  • (c) Gloucester; 
  • (d)  Liphook;
  • (e)  Scunthorpe;
  • (f)  Sunderland;
  • (g)  Swindon;
  • (h)  Wakefield;
  • (i)  Worthing; and
  • (j)  York.

The group did not consider that national or multi-regional customers would be adversely affected by the merger.

Professor Alasdair Smith, Inquiry Chair, said: “Andrew Page was in administration and would have closed down if a purchaser had not been found. The only two other purchasers would have bought a much smaller number of depots. We think that in most markets the merger will not further reduce competition compared to the alternative. However, in 10 local areas we are concerned that a reduction in competition could lead to higher prices and a lower quality of service.

In addition to the summary of provisional findings and the provisional findings report, a notice of possible remedies has been issued today, which outlines the measures the CMA could take if it still believes the merger would reduce competition when it makes its final decision. This identifies that competition could be maintained if Euro Car Parts sells depots in the 10 affected areas.

Anyone wishing to respond to the notice of possible remedies should do so in writing by no later than 28 September 2017. Anyone wishing to respond to the provisional findings should do so in writing, by no later than 5 October 2017.

More on this fast-moving story as soon as we get it – Ed

 

 

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SUKHPAL AND LKQ: ‘SIGNIFICANT INVESTMENT’ IN HGV FACTOR CHAIN

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SUKHPAL AND LKQ: ‘SIGNIFICANT INVESTMENT’ IN HGV FACTOR CHAIN


Truck part supplier Digraph Transport Supplies has been acquired in a joint deal between LKQ Corporation and Sukhpal Singh Ahluwalia. Terms of the deal have not been disclosed.

The move is significant as it marks the first time that both the founder of Euro Car Parts and the corporation that now own it have embarked on a deal as joint investors.

14-branch Digraph will retain all current employees and James Rawson will remain as MD. Rawson has also made an investment in the business.

CAT spoke briefly to Sukhpal to confirm the deal had taken place. He said that the ‘fragmented’ state of the HGV parts market lead it to being an area considered for expansion into for some time and that Digraph was the best fit in terms of matching ECPs ‘sales and customer service ethic’.

In a statement to his team, James Rawson said: “This investment will enable Digraph to access to the resources we need to grow the business and implement our expansion plans. We will work closely with ECP to enhance customer service levels. I am thrilled to be working with Sukhpal and taking up the challenge of extending the Digraph service to customers throughout the UK.”

In related news, Sukhpal has extended his three-year contract with ECP, retaining his position as Executive Chairman.

 

 

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NEWS: IMPERIAL HOLDINGS ACQUIRES PENTAGON

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NEWS: IMPERIAL HOLDINGS ACQUIRES PENTAGON


South Africa-based Imperial Holdings Limited has acquired dealer group Pentagon. The buyout was made through Imperial’s Motus subsidiary though terms have not been announced.

Pentagon, established in 1991 by its current Chairman, Trevor Reeve, has grown steadily from an initial Vauxhall franchise base to represent leading car and van manufacturers, Peugeot, Seat, Mazda, Citroen, Kia, Renault, Nissan, Fiat, Alfa Romeo, Jeep and Mitsubishi. The group employs 1,262 people, 46% of those have been with the business for 5 years or more.

Existing management will remain throughout Penatgon ‘for a transitional period’ to ensure integration with Imperial’s existing vehicle business. The Pentagon name will remain.

Commenting on the transaction, Mark Lamberti, Group Chief Executive Officer of Imperial said, “We are delighted to expand our international retail footprint into the passenger and light commercial vehicle market in the UK through the acquisition of Pentagon.”

Imperial Holdings Limited is not to be confused with the similarly-named Imperial Automotive Limited.

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KUMHO TIRE SALE BLOCKED BY WORKERS

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KUMHO TIRE SALE BLOCKED BY WORKERS


Kumho Tires plant in Georgia

A deal between the creditors of South Korean tyre brand Kumho Tire and Doublestar, a Chinese brand could be in jeopardy as workers in Korea threaten a general strike.

Problems at Kumho go back to 2010 when the company made a number of acquisitions, including the heavy engineering business of Daewoo. However, the losses quickly started to mount and a sale of the company was mooted, with various tyre and parts brands rumoured to be interested. Doublestar was confirmed as the buyer in May.

In a press conference, the joint committee against the sale of Kumho Tire to an overseas company told the Yonhap news agency they will stop all production lines at the tyre maker’s local plants and stage a general strike.

“The ongoing process to sell Kumho Tire to Qingdao Doublestar Co. will result in the transfer of some production volume to China from South Korea and lead to massive redundancies of local workers” Kang Jeong-ho who represents the committee told the agency.

Kumho employs 2,900 people at its tyre plants in the Korean peninsula.

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PARTS ALLIANCE TAKEOVER: UNI SELECT DEAL COMPLETED

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PARTS ALLIANCE TAKEOVER: UNI SELECT DEAL COMPLETED


The deal announced earlier in the year between Canada-based Uni Select and The Parts Alliance has been completed with the former acquiring the latter from a private equity group.

Now the deal has been completed, Parts Alliance CEO Peter Sephton will join Uni Select’s Executive Team as President and Chief Executive Officer of the European Automotive Group.

“All of my colleagues in our organization, our suppliers, members and all other stakeholders see the opportunity for long term financial growth and stability, as well as personal growth as we join a team of like-minded individuals,” said Peter Sephton.

“We could not be more pleased to be adding The Parts Alliance to the Uni-Select family. This is an exciting new growth pillar for Uni-Select in the large and fragmented UK marketplace” commented Uni Select CEO Henry Buckley.

 

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ACQUISITIONS NEED PLANNING

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ACQUISITIONS NEED PLANNING


Takeovers are in fashion in the aftermarket, but you need to find a company that’s the right fit, writes Adam Bernstein

The question of how to grow a business is one that has perplexed many for generations, namely: organic growth or acquisitive growth? It makes no odds which route is taken, the end goal is the same – greater profitability.

Acquisitions seem to be in vogue for the aftermarket at the moment. You’ve probably already read in this issue that Canadian parts giant Uni-Select has acquired The Parts Alliance, which has itself been on the lookout for smaller factors to buy. GroupAuto’s parent company AAG has made numerous acquisitions in the past year, including FPS and LKQ’s attempted tie-up between ECP and Andrew Page has attracted the attention of the Competitions and Market’s Authority, for which we await the decision in November.

There’s nothing wrong with organic growth, it’s just that it takes time. And compared to setting up a new unit from scratch acquisition takes less time, resources and finance that many firms struggle to provide. So how should firms acquire? What are the issues to be aware of?

DUE DILIGENCE
Understanding what is being bought is key. Although acquirers will usually be able to obtain warranties (think guarantees) from shareholders, there is no substitute for extensively checking the detail of the transaction through “due diligence.” The process falls into three distinct areas – legal which will be handled by lawyers; financial and tax which will be dealt with by accountants; and commercial which falls to the acquirer. If any skeletons in the cupboard are identified, these can be turned into indemnities and, as such, the risk stays with the vendors.

But while due diligence is important, desktop research should be completed before any approach is made along with market and commercial due diligence. Research is much easier nowadays as so much information is available in the public domain through Companies House, online databases, the web, and other information gained discreetly through industry sources. But remember, financial information can be months out of date and cannot be relied upon to give an accurate view of a firm’s financial health.

Skimping here will mean the acquirer will have no idea about the veracity of what they are being told.

WORKPLACE CULTURE CLASH
Acquirers need to recognise that buying the assets of a firm is one thing, but businesses also come with staff already employed and they must get along with the acquirer’s own employees. There are countless examples where mergers and acquisitions have failed because of culture clash – Daimler and Chrysler, AOL and Time Warner, HP and Compaq.

Culture is something that should be looked at closely; compatibility is one of the key requirements. Inevitably there is a learning curve following acquisition, but many find that due diligence meetings usually indicate if the businesses can adapt. Others suggest looking at the top to board level for clues on possible culture issues.

TAKING PRECAUTIONS
Of course, some businesses are bought when they are in trouble and here the purchaser should be particularly cautious.

Firms in trouble often find themselves the target of creditors who can apply pressure; this must be considered when arriving at a valuation.

A question to ask is what is the reason for the decline? Is it the loss of a major client or a bad debt? Is the firm out of step with the market and unable to compete? Can the decline be reversed? Some buyers choose to wait until the target goes into a formal insolvency process before making an offer to the administrator or liquidator when the price the target can be acquired at should be considerably lower. But there is a warning – there will be no warranties and the acquisition will be on a ‘buyer beware basis’. Buying a business from an administrator is risky; their job is not to help the buyer but to realise the greatest possible value for the creditors.

It’s important to also look out for Crown debt arrears such as PAYE and VAT. If these exist a time to pay arrangement is crucial if a rescue is to be completed. But buying a failed firm may mean that existing customers may lack confidence in the business. Similarly, creditors who would have suffered due to the business failure – will be wary too.

ACQUISITION COST
Acquisitions involve significant costs and many are not insignificant. Purchasers should budget for the corporate finance finder’s fee, accountant’s costs, legal fees (legal drafting, due diligence and deal completion matters), insurance warranty payments and costs allied with any associated funding. These can be over 10% of the purchase price.

Also, buyers should not ignore property and any stamp duty that is payable. And just as importantly is the hidden cost of the Transfer of Undertakings (Protection of Employment) Regulations 2006 – TUPE – which crystallises if there is a staff restructure following the takeover. Employees involved in a business acquisition can sometimes have a significant level of protection under TUPE – which in practice means that dismissing employees following an acquisition can be restricted or costly. Acquirers also need to consider any changes that have to be made to accommodate staff with disability issues.

There’s also the threat of loss of business due to change of control, changing relationships and the possible loss of key staff following the takeover. But these can be managed by having close liaison with customers and offering staff revised employment contracts that come with incentives. Further, existing contracts and arrangements will need to be honoured once the former management leaves.

But there is one more expense that is harder to quantify – time. It is important to make sure that the acquisition doesn’t become a huge distraction and the underlying business is not neglected.

BOLD MOVE
An acquisition is not for the faint hearted – acquirers should consider if they are better off focusing energy on organic growth or proceed ahead by taking a larger risk with an acquisition.

The adage that “people buy people” applies to staff as much as it does to the seller and customer relationship. Ignoring and potential staffing and culture issue can do more damage than any over-valuation.

NOTABLE AFTERMARKET ACQUISITIONS

  • There have been thousands of takeovers in our sector over the years. Here are a few that sprung to mind:
  • Lookers PLC took the decision to sell FPS Distribution, BTN Turbo and Apec Braking to Alliance Automotive Group (AAG) in 2016.
  • American recycled parts firm LKQ Corporation acquired Euro Car Parts in 2011 after months of rumour and speculation around the aftermarket (much of it incorrect). More recently, LKQ has acquired Arleigh International, a large distributor of touring and leisure products.
  • In 1973 Burmah Oil acquired Quinton Hazell ltd from the man of the same name. Hazell didn’t take to working as part of a large corporation and took a stake in the Supra Group, where he started competing against his former company.
  • ZF and TRW came together in 2016, though Helmut Ernst, CEO of ZF was keen to stress to CAT that TRW as a brand was ‘an asset that would remain’.
  • Cash and carry chain Maccess was sold in 1999 in an MBO valued at £68m. It was a rare example of then-parent Finelist selling a company for profit. Finelist Group collapsed in 2001 while Maccess lasted until 2015 before it ran out of ‘time and customers’ according to the then owner Tetrosyl.

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