Another deal in automotive parts sector as 30% stake in Repco sold for $US150 million

Another deal has been done in the automotive after-market parts sector with the private equity-owned Exego Group selling a 30% stake in market leader Repco to a US giant to help fund international growth plans.

Repco is the largest reseller and supplier in the automotive parts and accessories aftermarket in Australia and New Zealand, ahead of Burson Auto Parts, which was last week sold to private equity firm Quadrant for $148 million.

Under the $US150 million deal, new shares will be issued to the US-listed Genuine Parts Company, with an option for further shares should Exego meet certain conditions. Exego, which acquired the business four years ago under the name of CCMP, will retain a 70% holding.

Repco, with 280 stores across Australia and more than 3000 employees, supplies retail and trade customers.

Founded in 1922 as an automotive grinding business, Repco made history in 1937 by appointing Maud Terdich as the first ever female secretary of an Australian public company.

During the next few decades it spread across Australia, growing its automotive manufacturing business and purchasing parts distributors.

At its height during the 1960s it had 38 factories across Australia and at the turn of the century it was formalised as a division of Pacific Dunlop.

It was listed on the stock exchange in 2003 and four years later it was acquired by CCMP, now known as Unitas Capital. According to its website Exego has more than 4000 employees and a network of 435 locations, with annual sales of close to $1 billion.

Genuine Parts Company, which had revenue of $US11.2 billion in 2010, distributes automotive replacement parts through the US, Canada and Mexico.

Its chief executive and chairman Thomas C. Gallagher said the acquisition leaves the company well positioned to participate in significant long-term growth opportunities in the Australasian aftermarket, with potential for targeted growth in Asia.

“Exego is a familiar partner to us, as we have had the benefit of an informal relationship with their team for the last twenty years,” Gallagher says.

“The structure of this agreement will truly benefit our shareholders over the long term and allow us to participate in one of the fastest growing automotive aftermarkets in the world in a disciplined manner.”

Exego Group managing director John Moller described the new stakeholder as a natural long-term owner with a commitment to growth in this industry and we intend to use the injected funds to pursue this objective.