North American aftermarket parts distributor, Uni-Select, is making a foray into the UK market by purchasing The Parts Alliance from private equity group HgCapital in a transaction valued at £205m ($263m).
According to Uni-Select, the Solihull-headquartered company is the number two distributor in the UK with about 7% of the total £4.1 billion market.
Following seven acquisitions since 2014 – including that of Greater Manchester-based BMS Superfactors (pictured) last month – The Parts Alliance boasts two distribution centres and a network of more than 200 locations, including 161 of its own stores. It serves 23,000 repair centres.
Uni-Select's US and Canadian footprint makes it the number one paint, body and equipment distributor in the USA with about 30% market share; and the second biggest automotive aftermarket parts distributor in Canada. It, too, has been on the acquisition trail of late, completing 34 transactions since 2015.
“Our two companies are a perfect fit in terms of business profile, customer focus, entrepreneurial culture and commitment to people development,” said Henry Buckley, president and CEO of Uni-Select.
“We are excited to establish a third growth pillar in the large UK parts aftermarket that is expected to be immediately accretive in a market with great upside potential from future consolidation opportunities.”
On an unaudited basis for the fiscal year ended April 30th 2017, The Parts Alliance recorded £264.9m in sales and £17.8m in earnings before interest, taxes, depreciation and amortisation (Ebitda). Including the most recent acquisition, its run rate adjusted Ebitda is estimated at £21m, according to Uni-Select.
To finance the transaction, Uni-Select has secured a $625m fully underwritten commitment from National Bank of Canada, comprised of a new $100m term facility and an operating facility up to $525m.