JSE-listed automotive group, Motus, has acquired family-owned UK-based FAI Automotive plc as part of its strategy to expand its aftermarket business offering.
The transaction is effective from 1 October 2021, with the purchase consideration based on an enterprise value of £35 million.
Motus says the existing management team will continue to manage the business on a day-to-day basis post the transaction.
Established in 1968 and situated in Leighton Buzzard in Bedfordshire in the UK, FAI is a large, independent distributor of replacement automotive parts globally, including the UK and Europe.
Motus says FAI has more than 40 000 product offerings covering all major vehicle manufacturers and is a highly reputable brand in the replacement parts industry and is renowned for a high-quality range of products covering globally manufactured passenger vehicles and light commercial vans.
FAI had a turnover of R640 million in the 12 months to end-June 2021.
Motus says more than 50% of this turnover was generated from outside the UK, and the company has an operating margin in excess of 10%.
It says the acquisition underpins Motus’s intention to expand its Aftermarket Parts (MAP) business offering.
Motus is a distributor, wholesaler and retailer of parts and accessories for mainly out-of-warranty vehicles through 577 retail and franchised stores and specialised workshops, including 100 owned by Motus, which are supported by distribution centres in South Africa, Taiwan and China.
Motus says there are synergies with the existing MAP business to procure products at competitive prices from the Far East, including China and Taiwan, through combined buying power and to utilise and share the existing distribution centres in the region.
“FAI’s product line up is similar and complementary to Motus’s MAP business, in particular, components, which include engine, suspension, steering and braking parts, including a well-established and growing private label offering,” it says.
Motus, the vehicle business of Imperial Holdings, which was unbundled and separately listed on the JSE, reported in February 2020 that it had set up a distribution centre in Shanghai in China and was planning to invest up to R500 million in acquiring stakes in four or five aftermarket parts businesses in China.
Motus CEO Osman Arbee says the distribution centre in Shanghai will procure and distribute aftermarket parts to South Africa and other developing markets.
Motus says in its latest annual report for the year to end-June 2021 that expanding its parts and accessories business into markets outside of South Africa provides a significant opportunity for the business to increase utilisation and improve profitability of the distribution centres in Asia.
It says increased participation in this segment will also include backward integration to eliminate intermediaries in the wholesale supply chain.
“Our controlling interest in Arco in Taiwan and the distribution centre in China supports this strategy and enables us to leverage our buying power to procure parts at competitive prices,” it says.
Motus says it would also explore selective acquisitions to drive growth in international markets that complement global wholesale opportunities and, in a reference to the proposed but, as yet, unannounced FAI transaction, reported that it was in the advanced stages of acquiring a distributor of replacement automotive parts in Europe.
“The acquisition offers synergies across the operations, with a product line-up that is complementary to the group’s offering,” it says.
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