A relatively unknown broker from QLD. I believe select brokers from Bells and Shaws have access to the deal as well.
A good article from AFR below.
Bull bars and 4WD demand drives ASG to ASX float
by Simon Evans | AFR | 13 Nov 2016
Soccer mums and hardcore fourwheeldrive
enthusiasts are equal drivers of soaring demand for automotive parts and
accessories for the growing number of 4WD and sports utility vehicles on Australia's roads, as a new $45 million company heads
toward the ASX. Sales of 4WDs and SUVs are booming. They now account for 50 per cent of all new vehicles sold in Australia, up from 33 per cent just six years ago, and there is also rising demand for accessories and upgrade products that owners buy such as bull bars, roof
racks and mechanical enhancement of performance. Automotive Solutions Group intends raising $25 million in an initial public offering at an issue price of $1 per share as it acquires eight separate businesses involved in design, manufacturer, retailing and performance technology. The businesses include Roo Systems in Queensland, Umhauers in Geelong, Deering Autronics in Perth and JDR Motorsport in NSW.
Tanya Mason is the managing director of Automotive Solutions Group, while the company is being chaired by former Mitsubishi
Motors Australia chief executive Tom Phillips.
Ms Mason said the growth in the broader market for 4WDs and SUVs was set to accelerate.
"People are moving away from sedans," she said. "It's everything from your soccer
mums to the hardcore fourwheeldrive traditionalists who are going off road," she said.
"You don't see too many standard fourwheel drives anymore," she said.
The company expects to generate revenues of $42.7 million in 201617
and deliver a net profit after tax of $4.3 million. The float is being priced on an earnings multiple of
around 10.5 times forecast earnings for 2016-17.
The vendors of the respective businesses being acquired will hold about 12 per cent after the IPO.
Ms Mason, a former finance executive with companies including Aurizon, Noble
Group, Woodside and BHP Billiton, said the market is ripe for consolidation because
the market leader, ASXlisted ARB Corporation only holds around 7 per cent of the
total market. ARB has been a sharemarket darling and has a market capitalisation of
$1.4 billion and been able to deliver net profit growth of an average compound rate of
13 per cent over the past decade.
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"The remaining market is highly fragmented," she said. The eight businesses which
are being acquired in the float will retain their individual brands because they have
strongly established reputations among their local markets. "They're well known in
their own right," she said.
One of the businesses being acquired is Roo Systems in Queensland which has a
loyal following through its 4WD engine performance upgrade systems and sales of
roof racks, bull bars, nudge bars and exhaust systems.
Ms Mason is immersed in the industry and bullish about its prospects for growth. She
owns a Toyota Prado and is a regular offroader,
and estimates she has spent about $25,000 upgrading and modifying the vehicle over the years.
"It's everything from bull bars to snorkels – it's had a twoinch lift also," she said. Ms Mason said 4WD enthusiasts loved to modify and upgrade their vehicles, but even city drivers were inclined to install "nudge bars" on 4WDs and SUVs to protect them from
any minor damage in shopping centre car parks and other metropolitan hazards.
The rollup of the eight businesses has been masterminded by corporate adviser Strategic Equity Alliance, the firm which put
together the 2007 listing of the Greencross veterinary clinics business which listed with a market value of about $30 million. It has
become a much bigger company through deals along the way, and now has a market capitalisation of $820 million.
One of the other directors of Automotive Solutions Group is Mark Larkham, a former racing car driver who later went on to become
a director of V8 Supercars for eight years. He is also a commentator on Network Ten's coverage of a range of motor sport
broadcasts including the V8 Supercar series.
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