Metcash Limited has announced plans to use its supply chain expertise to grow Automotive Brands Group
Grocery wholesaler Metcash Limited has announced plans to use its supply chain expertise and infrastructure to grow
Automotive Brands Group.
Metcash announced today it had entered a $58.3 million agreement to acquire 75.1 percent of Automotive Brands Group.
Company officials were not available
for comment this morning, but in a release to the Australian Securities Exchange, Metcash CEO Andrew Reitzer says Metcash plans to grow the group’s automotive parts and aftermarket parts network.
“The opportunity exists for Metcash to provide merchandising and marketing skills, supply chain expertise and infrastructure to grow the business and realise significant synergies,” Reitzer says.
Automotive Brands Group CEO Paul Dumbrell says the transaction will provide improved ranging and supply chain efficiencies to current and future customers.
“We have a clear plan to grow the business,” Dumbrell says.
“There are thousands of independent operators in the automotive parts and after market sector and they are all opportunities for us.”
“Metcash will add significant value to our business and provide our franchisees and suppliers with the level of support they need in order for us to remain at the forefront of the automotive and aftermarket segment.”
The transaction is expected to close in early July.
Meanwhile, Metcash reported a full-year profit drop of 63 percent this morning, ahead of a planned $176.7 million company restructure, which includes the Automotive Brands Group purchase.
The company has announced it will issue new shares to raise $375 million to fund
such acquisitions.
These funds, according to
Metcash, will also go towards funding the upgrade of its warehouse distribution system.
Automotive Brands Group is Australia’s largest privately owned distributor and franchise operator in the automotive parts aftermarket sector, distributing to a network of 241 stores.