Automotive parts group sold in £205m deal
Shirley-based automotive parts distributor, Parts Alliance, has been sold to a Canadian group working in the same sector in a deal worth £205m.
HgCapital, which owned Parts Alliance, agreed the sale with Uni-Select, a listed distributor of automotive refinish and industrial paint products and aftermarket parts.
HgCapital initially invested in Parts Alliance in August 2012. Over the course of the investment period, the group has expanded through a series of HgCapital-led acquisitions – the latest just last week with the purchase of North West-based member, BMS Superfactors.
The acquisitions helped to create a group of 13 parts distributors spread around the UK with a combined turnover of around £450m.
Its customers range from independent garages to multi-branch workshops and fast-fits, and they are served by a fleet of over 1,000 vehicles and more than 2,900 staff across the group.
The enlarged group is now one of the largest players in the sector, which HgCapital said helped to materially increase Parts Alliance’s appeal to both European and North American buyers seeking a point of access to the UK aftermarket car parts sector.
The Parts Alliance sale is the thirteenth realisation from the HgCapital 6 Fund (2009), which has now delivered overall realised returns of 2.3x and a 24% gross IRR (Internal Rate of Return). The fund has now returned in cash 130% of the original investment made.
This sale follows the successful exits of Zenith (2.9x / 47% IRR) and QUNDIS (3.5x / 30% IRR) which completed earlier this year, and a number of further realisations from HgCapital 6 are anticipated over 2017.
Peter Sephton, CEO at Parts Alliance, said: “This has been a fantastic journey, building a sector leader in just over four years with 10 acquisitions and driving above average organic growth.”
Martin Block, partner, HgCapital, said Uni-Select was an ideal partner for the next phase of Parts Alliance’s continued growth and development.
“As a buy and build in a fragmented and dynamic sector, our management team were able to create a business of scale and real capability through their drive, professionalism and determination. Parts Alliance brings together a high-quality group of distinct brands with a common culture and local identity. We wish both the team and the new owners every success for the future,” he said.
Henry Buckley, president and CEO at Uni-Select Inc, said the group was relishing the prospect of entering the UK market.
“The UK parts aftermarket is one of the most fragmented in Europe with significant potential for consolidation,” he said.
He said Parts Alliance had a proven growth platform and had demonstrated its ability to drive profitable growth, both organically and through acquisitions.
“Our two companies are a perfect fit in terms of business profile, customer focus, entrepreneurial culture and commitment to people development,” he added.
HgCapital was advised by Baird and White & Case.