You could argue that the AMA/Capital S.M.A.R.T/ACM deal is just about the biggest thing to happen to the industry since the invention of the motor car.
There's a lot to take in. I've reached out for comments from a number of people in various organisation but no responses as yet, it seems that it will take a couple of days to digest the ramifications of this deal. Here are some of the key points that I have been thinking about.
Your graphically challenged editor also had a stab at an infographic to show the current repair landscape with all of the AMA sites in Australia, there's another five sites in New Zealand too. So we're looking at 175 shops carrying out surely a minimum of 30-40% of Australia's collision repairs.
The multiple of 20 seems staggeringly high when even Google doesn't rate that big a multiple. AMA generally pays a multiple of between 3-5 for its purchases. However AMA predicts $17 million in 'synergies'.
AMA says S.M.A.R.T will be run as a stand-alone business within AMA Group, retaining its key management team. The AMA investor statement says that S.M.A.R.T is recognised as Suncorp's recommended repairer'. The Suncorp statement says: "Under the terms of the Transaction, Suncorp will continue to use its existing valued network of smash repair partners.' It would make logical sense for out of scope S.M.A.R.T work to be funnelled into the AMA Group wouldn't it?
In terms of the supply chain it looks as if AMA Group with ACM Parts could become self sufficient in paint, consumables and parts. S.M.A.R.T has procured its paint, consumables and equipment from Australian distributors, AMA Group not so much. AMA Group uses Glasurit paint, Capital S.M.A.R.T uses PPG.
All the while in the investor report there are references to growth opportunities. Will this be achieved with new sites and new work providers? Will Capital S.M.A.R.T remain exclusive to Suncorp or will it repair cars for the challenger insurer brands?
We're hoping to talk to AMA Group CEO Andy Hopkins to pose some of the questions, in the meantime if you have any questions or opinions about the deal, please leave a comment.