AMA has announced that it has entered into a binding Share Sale and Purchase Agreement with GUD Holdings Ltd whereby GUD Holdings Limited will acquire the ACAD businesses, including the Fully Equipped business and excluding the ACM Auto Parts and Fluiddrive businesses, for a gross purchase consideration of $70m. The ACAD business is the aftermarket arm of AMA and includes East Coast Bullbars, CSM Service Bodies, Automotive Electrical & 4WD Accessories, Uneek 4x4/Barden Fabrications and NZ aftermarket accessories maker Fully Equipped.
The release says: "The Board has for some time been reviewing its strategic objectives aligned with business simplification and leverage of the Group’s core capabilities to determine the optimal focus for the AMA Group and, while the ACAD business is a strong well performing business, it was determined that a focus on the Panel Repairs sector would provide greater opportunities for investment and growth for shareholders.The transaction is targeted for completion on 31 December 2020, subject to certain conditions typically found in a transaction of this nature.The proceeds of the sale of circa $70m will be used to retire debt and importantly set the Group up for continued growth in its core Panel Repairs operations."
CEO Andy Hopkins said “I am excited about the transaction which allows AMA Group management to focus on driving growth in its core operations and reinforces the strength of our balance sheet position thereby ensuring we are in the strongest position possible to deliver future shareholder value growth.
“The ACAD business is performing well and is closely aligned to the GUD business of manufacturing and retailing of motor vehicles parts and accessories. I believe that under GUD’s management the business will continue its history of strong growth for the benefit of our mutual customers and provide ongoing opportunities for its employees. We thank the ACAD management team and employees for their contribution to the AMA Group over the years and wish them continued success under the GUD banner.”
In August the company reported an operating profit before interest and tax that had decreased from $34 million profit for FY19 to a $46.9 million loss for FY20 and total borrowings and other financial liabilities at $385,404 million.
The ACAD announcement was made at AMA's AGM which took place on 19 November. In his address to the AGM CEO Andy Hopkins said: "The consolidation of the panel industry still has a long way to go and the growth of our core business and capability will return in January 2021 with a number of potential additions earmarked in the second half of this year. Q3 last year saw repair volumes return and in the quarter we were well on track to achieve FY20 performance and targets I outlined to shareholders in February 2020."
Refering to weathering the pandemic Hopkins said: "We also successfully negotiated reduced rent for most of our sites, stopped all non-essential capex projects and closed any loss making or marginal sites to optimise our foot print. The AMA Board and senior management team took a pay cut and no cash bonuses were paid for FY20."
He went on to say: "The improvements and cost management disciplines we implemented as a result of the pandemic are certainly a silver lining and are here to stay and will contribute to the margin improvement for FY21."