The Financial Review's Street Talk column has reported that Suncorp has formally hired boutique firm Luminis Partners to oversee a strategic review for Capital SMART, which will consider a number of options including selling a majority stake to an offshore acquirer.
An internal memo flagging the strategic review was circulated to Capital SMART staff last week according to Street Talk.
According to its sources Suncorp is seeking a sale multiple of at least 10 times earnings, which would equate to more than $300 million.
It formalises something that has been in the works for months - as reported by Street Talk as far back as August last year.
Capital SMART repairs vehicles for Suncorp and potential buyers are likely to focus on opportunities of opening up the network to third party customers and potential M&A opportunities.
The biggest company, according to IBIS World, is AMA Group which has 7.2 per cent market share. IBIS World estimates Capital SMART has 4 per cent to 5 per cent of the motor vehicle body, paint and interior repairs market.
One potential acquirer is former Capital SMART founder Jim Vais, who is working on a bid with Sydney-based buyout firm Quadrant Private Equity. The consortium has hired Allier Capital to help with the due diligence.
However the Vais/Quadrant pairing is expected to face to face stiff competition from other trade and private equity players.
Capital SMART is expected to come to market with long-term agreements with Suncorp, which should shelter the company's revenue and earnings for at least the medium term.