RPM Automotive Team Ltd (ASX:RPM) has acquired a new business in a bid to expand its vertically integrated offering into the speedy-increasing 4WD accessories market place.
The ASX-lister has picked up AFT Automotive Team, which features Equipit Team, a primary wholesaler of 4WD add-ons, and All Terrain Design, a major designer of 4WD motor automobile extras.
RPM says the most recent purchase will develop its vertical in the automotive afterparts business across the style and design, manufacture and wholesale distribution hubs.
The corporation will acquire AFT for $2.4 million in a 50/50 money and shares offer, reflecting an normal earnings in advance of interest, taxes, depreciation and amortisation (EBITDA) numerous of 3.75x.
This acquisition is anticipated to be earnings-accretive from the get go.
Bringing AFT into the fold
Speaking to the get, RPM CEO Clive Finkelstein reported: “This is a strategically vital acquisition for RPM, strengthening our situation in the quick-growing 4WD components sector and drastically expanding our vertically built-in supplying in the automotive afterparts sector by means of enhanced capabilities in style and manufacture.
“The continued expansion of our wholesale small business enhances our solid retail extras distribution as a result of greater merchandise array and source chain handle.
“This acquisition enhances our Method Off Street business, which manufactures 4WD products, by way of improved design capabilities and streamlined producing procedures.
“In addition, we have efficiently labored with the management group over many many years, and we are self-confident in the advancement prospects in advance.”
About AFT’s businesses
AFT’s Equipit Group owns the MAX 4X4 add-ons arm — a major model in the industry, offering bull bars, aspect steps and rails to 4WD proprietors.
RPM suggests the MAX manufacturer has formulated a strong status for high quality add-ons that are excellent benefit and effortless to in shape.
AFT’s other company, All Terrain Style and design, is a style and design organization specialising in motor motor vehicle equipment, predominately for the 4WD market.
All Terrain utilizes market place-foremost technological know-how to give a range of expert services, including 3D scan tooling, CAD and technical drawing, and custom structure get the job done for new items.
The offshoot owns and controls the structure and manufacture of all MAX 4×4 Add-ons.
The suppliers guiding the AFT acquire commented: “We are extremely pleased to be signing up for RPM in order to guidance the up coming section of our progress.
“We have formerly worked with Clive in constructing a profitable business enterprise in this market and we are energized about the possibility to unlock the advancement potential of the merged entity. We will be in a position to leverage the existing RPM infrastructure to expand our wholesale operations although driving revenue by RPM’s distribution community.”
What does the acquisition suggest for RPM?
RPM believes today’s deal supplies opportunities for cross-marketing in just the company’s add-ons division and for improved functioning leverage.
What’s a lot more, Equipit’s wholesale products variety in 4WD components complements RPM’s current retail components business.
In addition, RPM will grow Equipit’s wholesale functions from Queensland to a nationwide footprint by leveraging RPM’s current infrastructure in the course of Australia.
Meanwhile, the acquisition of All Terrain Design’s capabilities in specialised layout will open alternatives for larger design and style get the job done internally, as perfectly as for exterior shoppers.