Metcash is expanding itself once again.
The company’s newly created subsidiary of Metcash Automotive Holdings, Australian Automotive Distribution (AAD), has acquired the assets and operations of national wholesale car and truck parts business Australian Truck and Auto Parts Group (ATAP), which specialises in brake, steering and suspension products, for approximately $84 million.
The acquisition also includes Auto Brake Service (ABS), a national franchise network of 53 brake and steering and auto repairs specialists. The assets and operations being acquired currently generate annual sales of circa $90 million.
Andrew Reitzer, Metcash CEO, said the acquisition will add to Metcash’s hardware and automotive pillar.
“Our automotive aftermarket parts business is already adding value. The acquisition by AAD is part of our clear plan to grow this business and will enable Metcash to use its core strengths in warehousing, logistics and marketing, to service a significant number of independents nationally,” he said.
“The automotive aftermarket parts retail sector is a large market worth $5.6 billion. The acquisition will provide potential for growth within Metcash’s hardware and automotive pillar. AAD will have significant scope to further consolidate the wholesale supply market, which supplies to approximately 2,500 independents.”
Metcash believes the acquisition provides scope for expansion of the ABS franchise network and buying synergies. At the same time the company will look at adding warehouse in NSW and SA.
Paul Dumbrell, CEO of ABG, will lead the enlarged automotive group.
Dumbrell said he was encouraged by the momentum within the business. “Metcash has already added significant value to ABG. The acquisition by AAD will allow us to leverage our relationships further to improve product ranging to our growing network of retailers and customers as well as providing a new platform for growth,” he said.
The acquisition is expected to be completed before the end of May 2013.