The sale process for Quadrant Private Equity’s $1bn MotorOne business is past the first lap, with initial bids due the week starting September 30.
It is understood that two or three suitors are lining up to buy the business, including private equity firm Bain Capital.
Bain was a keen suitor of Australian tyre wholesaler TyreMax when it was up for sale.
Working on the sale of MotorOne are Macquarie Capital and Miles Advisory.
DataRoom understands that MotorOne’s annual earnings before interest, tax, depreciation and amortisation are about $75m, and it generates income from three main business units: crash repairs, three to five year subscriptions for minor repairs such as dents, and car-care services for added extras on cars for dealerships.
MotorOne describes itself as a leading business-to-business distributor of aftermarket products and services to Australian dealerships. It is in a strong position in Australia after growing market share and expanding into new channels.
Quadrant bought MotorOne from private equity firm Navis Capital for $300m in 2016 when it was known as WorldMark, and key members of management retained equity in the business.
Bapcor and Archer Capital were both underbidders at the time, but most see Bapcor, which Bain Capital bid for this year, as no longer in a position to compete, following profit downgrades.
Sydney-based private equity owner Quadrant moved to sell MotorOne in 2020 through Miles, which originally sold the business to Quadrant.
Quadrant was believed to be seeking a price of at least $600m when MotorOne was generating about $40m of annual EBITDA, so the price could be closer to $1bn this time.
GUD is likely to sidestep the option, while O’Reilly Auto Parts is retail-dominated and would not suit MotorOne.
Sojitz in Japan previously showed some interest when it was on offer around 2020, and Navis Capital, CPE Capital, Affinity Equity Partners and Archer Capital previously looked at the business.
Pacific Equity Partners showed interest the last time it was for sale, but PEP is not a suitor this time.
The pitch back then concerned MotorOne’s distribution network, with high barriers to entry, consistent earnings and defensive nature in a growing sector.
According to IBISWorld, the number of motor vehicles is forecast to grow steadily, in line with population growth, and higher disposable incomes will contribute to greater consumer demand for motor vehicle parts.
RiteBite also a potential sale
Quadrant is moving to offload MotorOne as it also considers possible sale of Darrell Lea owner RiteBite Group and Affinity Education.
It is understood that RiteBite, advised by UBS, generated recent buyer interest from Mondelez, the snacks giant behind Oreos, Toblerone and Cadbury, and a German confectionery company, with some pointing to Haribo.
Quadrant’s gyms getting back in shape as losses narrow
The private equity-owned company that owns Fitness First Australia has faced the headwinds of a pandemic and now a cost-of-living crisis.
Yancoal primed to snap up Anglo coal portfolio
Speculation is mounting that Swiss commodities trader Glencore is betting on a break-up play for the Anglo American coal portfolio, and that it may only be bidding for some of the assets.