Street TalkAMA to buy Suncorp's Capital SMART, ACM Parts
Updated Sep 30, 2019 — 10.01am,first published at 8.56amASX-listed AMA Group is set to make a clean sweep of Suncorp Group's up-for-sale automotive businesses.
Street Talk can reveal AMA is in exclusive talks to buy Suncorp's smash repairer Capital SMART Repairs and automotive parts supplier ACM Parts following separate auctions for both businesses.
The combined sale price is $440 million, sources said.
AMA, which is backed by Australian private equity firm Colinton Capital, is expected to fund its acquisitions with an equity raising.
AMA shares are expected to go into a trading halt on Monday morning.
It is understood UBS, Canaccord Genuity and Bell Potter Securities are on board to help the company with a $200 million-odd equity raising. AMA had a $659 million market capitalisation as at its last close.
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The bigger acquisition would be Capital SMART Repairs, which is expected to be viewed by investor as a logical move for AMA Group.
AMA is the biggest player in Australia's fragmented smash repairs market, while Capital SMART, which makes the bulk of its revenue fixing cars for Suncorp's insurance arm, is the No.2 player would give AMA a few extra points of market share.
Data provider IBIS World reckons AMA, whose panel repair business came to the attention of private equity giant The Blackstone Group, has about 7.2 per cent market share, while Capital SMART has 4 per cent to 5 per cent of the motor vehicle body, paint and interior repairs marke
AMA tabled a binding offer on September 23 for Capital Smart alongside Britain's Belron, CDPQ-backed Fix Auto and a handful of private equity firms including Quadrant Private Equity and Pacific Equity Partners.
This column understands Jefferies Australia-advised Belron was the underbidder. Luminis Partners oversaw the Capital SMART sale for Suncorp.
As for the smaller ACM Parts, Suncorp hired Deloitte Corporate Finance's Alex Jordan to oversee a strategic review for the division earlier this year.
ACM Parts specialises in selling high-quality recycled, certified and OEM parts to Australia's auto repair industry. It was established in 2013 as a joint venture with LKQ Corporation. Suncorp bought LKQ's stake in 2016.
The business, which has sites across Victoria, New South Wales, the ACT and Queensland. gives Suncorp a channel through which to sell parts of written off vehicles.
It comes after AMA has run the numbers on a handful of potential purchases recently, including the trailering and towing parts specialist Horizon Global's local arm, and only one year after Blackstone's bid to buy AMA's smash repairs unit fell over.
