Sharechat Logo

Bapcor wraps up exit from unwanted Hellaby assets with $35M sale of TBS Group

Thursday 5th April 2018

Text too small?

ASX-listed autoparts maker Bapcor has exited the last of the leftover Hellaby Holdings assets it didn't want with the sale of industrial asset maintenance firm TBS Group for $35 million, reaping more from the divestments than flagged. 


The Victoria-based company today signed an agreement to sell TBS to an undisclosed buyer, with the deal set to settle later this month, it said in a statement. Some $2.5 million of the price won't be paid until September and is subject to certain conditions. 


Bapcor will have generated $99 million from the sale of TBS, Hannahs, Number 1 Shoes, and Contract Resources, beating the $92 million it expected to generate from the divestments when reporting its first-half earnings in February. The autoparts firm took on the businesses when it bought Hellaby for $352 million and delisted the Kiwi firm from the NZX. But it was only ever interested in the New Zealand company's automotive unit, which has been tracking ahead of Bapcor's expectations. 


"The divestment of the final non-core asset relating to the Hellaby Holdings Ltd acquisition is in line with Bapcor's strategy of specialising in the automotive aftermarket," managing director Darryl Abotomey said. "The total proceeds from the divestment programme are consistent with Bapcor's expectations."


Hellaby's directors tried to fend off the Bapcor takeover, urging shareholders to reject the deal as undervaluing the Kiwi company's different units. However, the Australian firm secured control and declared the deal unconditional. 


At the time of the takeover, independent adviser Grant Samuel valued Hellaby between $352.2 million and $402.7 million, or $3.60 a share to $4.12. Of that, the automotive unit was the most important with an enterprise value of between $285 million and $313.5 million, followed by the resource services group at $123.8 million-to-$141.5 million, and the footwear division at between $26 million and $30.3 million. 


Hellaby bought TBS three months before Bapcor launched its takeover bid, paying $45 million upfront in cash and scrip. 


The sale of the unwanted Hellaby assets means Bapcor effectively paid $253 million for the Kiwi autoparts business, below the bottom range of the Grant Samuel valuation in November 2016. 


New Zealand's auto industry has been enjoying record new car sales in recent years as an expanding population and robust tourism stoke demand for vehicles, while a strong dollar and cheap finance makes them easier to purchase. Government figures show retail sales of motor vehicles and parts rose 9.4 percent to $12.43 billion in the year ended March 31, 2017, accelerating from a 4.9 percent pace of growth a year earlier.


Bapcor shares were unchanged at A$5.60 on the ASX and have slipped 0.9 percent so far this year. 



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: Blue-chip stocks Meridian, A2 lead market lower
NZ dollar rises on Brexit hopes, rate cut reassessment
Three not failing, just needs a new owner - MediaWorks CEO
Major investors back new CBL class action targeting directors
Rip Curl purchase a done deal on Kathmandu proxies alone
Comvita chair Neil Craig eyes the exit once he finds a new CEO
Mercury raises guidance on increased storage, high spot prices
Eroad reports strong 3Q sales growth, eyes ASX listing
MediaWorks puts TV business on the block
NZ dollar benefits as preliminary Brexit deal improves risk appetite

IRG See IRG research reports