Published on February 4th 2018 in

AMA Group confirmed that Blackstone had offered to buy the MSO

AMA Group became the No.1 collision repair chain in Australia after buying Gemini in 2015. Blackstone’s offer has valued the AMA Group’s “Panel business,” which includes eight collision repair-related companies, at $A530 million “on a cash free, debt free basis,” company Secretary Terri Bakos wrote in a letter to shareholders. “There is no certainty that a transaction with Blackstone or any other party will eventuate or of the nature of any such transaction,” Bakos wrote. “AMA will continue to inform shareholders and the market in accordance with its continuous disclosure obligations.”

Bakos’ letter was in response to an Australian Financial Review (AFR) column where it was also reported that Bell Potter industrials analyst Chris Savage called the almost $429 million offer “reasonable” but  “not necessarily a knock-out bid.” AFR also cited unnamed sources’ reports that AMA had earlier wanted to gauge market interest in its collision portfolio.

Executive Chairman Ray Malone told the Sydney Morning Herald in August 2017 that he had designs on making the company an $1 billion-dollar business. According to the newspaper: “I feel like we’re just getting started,” he said. “Now it’s a question of more of the same. Of course, we will never stop. We will just keep rolling up. I have $250 million of deals on my table at the moment that I’m working on.”

Malone estimates AMA Group has around 1800 employees but says it’s hard to keep track. “We’ve been growing so fast. We are growing fairly aggressively and I can’t see it stopping. It’s actually getting easier for us. It’s just now a matter of more. It’s inevitable. We think we will become a gorilla.”

Recently, the company’s past the 100-shops in its portfolio and the annual report stated that same-store sales were up 4.7 percent year-on-year, and the panel portfolio did about $261.64 million in sales, buoyed by revenues from shops acquired in 2016 and the 2017 fiscal year.

Interestingly, the news about Blackstone’s nearly $429 million offer for AMA comes a little less than a year after Bloomberg reported that Blackstone and Carlyle were interested in selling the Service King chain in the US for as much as $2 billion. Clearly, this is a “watch this space” scenario.

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