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AMA repairs consolidation quest snares Wales

Heavy vehicle repairer one of several with truck services

 

AMA Group’s consolidation effort in the commercial vehicle repair sector has seen it scoop up New South Wales-focused Wales, it has been confirmed.

Wales is one of three firms with truck-repair functions AMA includes in a purchase pipeline published in its ‘company update’ for the Australian Securities Exchange (ASX).

The others are Re-Car, with businesses in Queensland and Victoria, and Adelaide’s All Transport Crash Repairs.

It is to be “business as usual” following the purchase for the bought company, which has separate arms looking after truck and bus repairs.                                                        

“Nothing changes from our perspective,” CEO Darren Wales says.

“It’s just an opportunity to join with the AMA Group – a publically listed company.

“They’ve offered me the opportunity to head up their heavy vehicle division, so we are in charge of growth and acquisitions on the heavy vehicle side of things – and look, it’s a good fit.

“It gives the backing of a publically listed company … and enables us in the continuing of the service of our clients.

“It’s huge. It’s a big challenge. We’ve got an awful lot of work ahead of us – certainly ahead of myself – but no, looking forward to it.

“I’ve emailed the majority of our clients and let them know where we sit at, but other than that it’s business as usual.”

The deal has “probably” been about eight months in the making, other sources revealed exclusively to ATN’s sister publication, Australasian Bus & Coach (ABC) magazine, saying both parties have been going through “due diligence, with the expected changeover to happen on the 28th“.

In terms of any potential branding change, it is believed this will also stay as is, but “…you might have a little ‘Division of AMA’ or something [on the Wales logo] as it changes.


Read the findings of NTARC’s most recent major truck accident report, here


Last month, Wales was clearly highlighted as part of AMA Group’s growth plans for its Panel division.

With “trading conditions for the AMA Group Limited … tracking within expectations”, group CEO Andrew Hopkins delivered the following update on the status of acquisitions: “The acquisition pipeline for AMA remains strong.

“We are delighted to confirm that we have increased our promised revenue acquisition run rate in the second half to in excess of $120 million.”

“The current list of acquisitions are in line with our new strategic direction of growing into the heavy motor space and, most importantly, taking the third-largest east coast consolidator.”

Hopkins concludes that these acquisitions – including the greenfield enterprises, essentially new and undeveloped sites – are expected to contribute in excess of A$120 million revenue and approximately A$12 million of earnings before interest, tax, depreciation and amortisation (EBITDA) annually once fully integrated.

“Multiples for the businesses being acquired have been on average 3.8 times,” he says.

“The current acquisitions will be funded through a combination of debt and cash.”

AMA expects the acquisitions to settle over the coming months.

Commenting on the acquisitions, Hopkins adds: “We are very happy with the second half of 2019 and pleased that the new team structure and new strategy is continuing to deliver results.

“The acquisitions team has been very busy in the second half with us expecting to finalise binding agreements for acquisitions / open (greenfields) with annualised revenue in excess of $120m of by June 30.

“This is well ahead of what we expected when we presented our results for the first half. We see no slow down for the business with new entrants and look forward to a strong and robust 2020 under the new management regime,” he explained.

Indicating AMA’s deepening ambition to consolidate its position in the heavy vehicle collision-repair industry – and to mirror global trends in both general automotive and commercial vehicle shop acquisitions, often to the preference of leading automotive insurance providers – last September it also purchased Western Australia-based truck and heavy vehicle repairer Parins.

As it explains, Parins was established more than 40 years ago and offers a range of services, from recovery of vehicles and repairs to the rebuilding and refurbishment of heavy transport vehicles and machinery, with a strong focus on minimising downtime.

Parins added to the “growing truck repair footprint capability AMA has”, the company explained at the time. Its other AMA facilities that do truck repairs are located in Victoria at Winter and Taylor is Geelong.

Earlier still, it acquired Re-Car, which has been repairing trucks and trailers for over 60 years, and was Australia’s largest wholly owned network of commercial vehicle repair centres.

Re-Car was acquired by Car-Trek Australia Pty Ltd in 2005

“Based on the current pipeline, by June 19 AMA will finalise binding agreements/open (greenfields) for panel and related businesses” identified as:

  • Smash Care – 8 Sites
  • Correct Panel Group – 4 Sites
  • KSR Autobody – 1 Site
  • Inkerman Panels – 1 Site
  • Norm Flynn Smash Repairs – 1 Site
  • Re-Car Australia – 3 Sites
  • Wales Truck Repairs – 2 Sites
  • All Transport – 1 Site
  • Gemini Chatswood (greenfield)
  • Gemini Ballarat (greenfield)
  • Gosford Hail Shop (greenfield).

The AMA Group – with its Gemini Accident Repair Centres head office located in Bundall, Queensland – “is a leader in the automotive aftercare and accessories market”, it states.

“Each of its specialised automotive aftercare and accessory companies have a commitment to excellence in customer service, cost-effective operations, and sector-leading brands.

“AMA is Australia’s largest accident repairer business and owns and operates more than 120 accident repair shops, which trade under a variety of brand names throughout Australia and New Zealand.”

As its focus is on the wholesale vehicle aftercare and accessories market, its services include smash repair shops, automotive and electrical components, vehicle protection bull bars and other outlets for servicing brakes and transmissions.

Hopkins was made the AMA Group’s CEO and executive director earlier this year.

He founded the Gemini Group in Perth in 2009 and built the Gemini brand into one of the largest privately owned consolidators offering integrated claims management and repair services to the insurer, corporate and consumer markets, AMA states. 

With more than 35 years’ experience in finance, acquisitions, strategy and building insurance relationships, his ability to continually innovate will, “…broaden AMA’s relationships with insurance companies both domestically and internationally”, it says.

AMA has appointed Steven Bubulj as Panel division CEO, effective today.

“Steven comes with extensive insurance industry experience and has worked alongside AMA as an industry partner with leading insurance and industry brands such as IAG, ICar, Youi and more recently QBE,” AMA says.

 

 

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