AMA will sell the collision repair business to Blackstone via a de-merger for $508 million, 10.7 times projected earnings, valuing the collision repair businesses of AMA at 86 cents-per-share. AMA’s remaining automotive components, vehicle accessories and procurement operations to remain on the ASX as a separate company.
The buyout completes a remarkable rise by AMA’s executive chairman Ray Malone, who built the company into the biggest player in the industry, with 113 panel beating workshops around Australia. Just eight years ago, AMA had a market capitalisation of $20 million. Mr Malone was the original founder of the Mr Gloss car repair business in the Melbourne suburb of Moorabbin early in his business career and has been in the collision repair industry for 30 years.
Mr Malone said: “The two transactions were the best way of ‘funding two growing but distinct businesses’. This separation will ensure that neither business has its prospects limited by the competing demands of the other business.” Shareholder approval is required with the deal undertaken through a scheme of arrangement.
Blackstone made an indicative buyout proposal of $530 million in late January for AMA, and had been conducting extensive due diligence inside the business over the past few weeks. AMA runs several collision repair brands including Mr Gloss, BMB Prestige Collision Repairs, Shipstone Accident Repair Specialists and Rapid Repair Centre.
AMA Group Vehicle Panel Repair CEO, Andrew Hopkins, who will continue as CEO of the Panel Business post-acquisition said: “Over the past two years, we have rapidly grown our vehicle panel repair operations to over 100 sites and in the process fundamentally changed the way the industry engages with its primary customers, the automotive insurance companies, to the ultimate benefit of their customers, the insurance policyholders. Taking the business private will increase our senior management team’s focus and allow us to further improve our cost competitiveness and in the process, strengthen our insurer customer relationships. Throughout the transaction diligence period we have been very impressed by Blackstone’s level of understanding of our business and their willingness to embrace our plans for growing and improving the operations. We are excited about them partnering with us for the next stage of our development.”
AMA posted an extensive update of the demerger and reorganisation of the group on their website: AMA Group Ltd