US-based vehicle retailer, Penske Automotive, has signed a contract to buy Western Star Trucks Australia (WSTA), the commercial vehicles division of Australia’s Transpacific Industries, for $200m.
The company primarily distributes heavy and medium-sized trucks, as well as spare and aftermarket parts, for Western Star Truck, MAN and Dennis Eagle in Australia and New Zealand. The distribution network covers more than 80 dealers, with 65 of those in Australia and 16 in New Zealand. It also has dealer representation in Papua New Guinea, the Philippines and Indonesia.
The buyout is expected to be completed by the third quarter of this year, subject to certain conditions including OEM approval. Penske said once complete it expects the acquisition to generate around $420-$460m in revenues for the company.
Penske confirmed it was buying the inventory, parts and the assets of WSTA but would not comment more specifically on what that included, or what its plans were for further investment, ahead of the deal’s completion.
The company’s chairman, Roger Penske, did say the purchase would help enhance the US company’s global business profile, and provide it with the opportunity to expand its business while potentially providing a stepping stone to Southeast Asian markets.
Currently, Penske Automotive does not have any other activity in Australia, New Zealand or Southeast Asia, but its executive vice president of Investor Relations, Antony Pordon, told Automotive Logistics that it had done in the past and understood the marketplace.
“Back in the late 1980s and throughout the 1990s, Mr Penske and other members of our team owned and operated Detroit Diesel, a heavy-duty diesel engine manufacturer,” he explained. “As part of that operation, we managed distribution in Australia and a world-wide parts distribution centre, too. We also owned and operated a diesel engine dealership in Southeast Asia as part of the Detroit Diesel investment.”
Pordon went on to say that the company hoped the investment would provide it with scale in the market and allow it with the chance to bring other business opportunities to the table.
Paul Glavac, managing director of Transpacific’s Commercial Vehicle Group, said the company was eager to move forward as part of Penske Automotive Group.
“We are excited about our prospects and look forward to continue working with our existing dealers and customers,” he said. “Our relationship with Transpacific will remain strong, and we will continue to provide quality products and customer service to this industry-leading company.”