Elite Tyre Group and Super Tyre Mart follow TTS purchase
Burgeoning listed tyre and aftermarket business RPM Group has snapped up two more tyre firms in Victoria.
Just two months after nabbing Traralgon Tyre Service (TTS), RPM reveals it has taken control of Elite Tyre Group (ETG) and Super Tyre Mart (STM) for $1.6 million with the spending split 70 per cent cash and 30 per cent equity.
“Having raised capital to fund the company’s growth, I’m delighted to welcome Elite Tyre Group and Super Tyre Mart into the RPM fold,” RPM CEO Clive Finkelstein says.
“These two businesses are operationally and culturally aligned with RPM, and we see attractive potential to add value to both businesses through revenue synergies from cross-selling products and cross-pollinating customers, and cost synergies from the scale benefits of a larger Group.
“Importantly, these acquisitions are value and earnings per share accretive before synergies, and comfortably funded, supporting further sustainable growth.”
RPM notes the newly purchased firms had revenue of $5.6 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of $291,000 last financial year.
Revenue and EBITDA in in the coming year are forecast to be $6 million and $480,000 respectively.
Read how RPM came to own Traralgon Tyre Service, here
ETG is to be integrated into RPM’s Wholesale Tyre Division (Wheels and Tyres), and STM will be integrated into RPM’s Repairs & Roadside division, on deal completion expected June 30.
While PRM is keen to highlight ETG’s passenger tyre credentials, it is also a light and heavy truck tyre vendor.
“The acquisition of ETG is strongly aligned with RPM’s goal of expanding the group’s tyre wholesale and distribution platform,” RPM says.
“Around $250,000 of efficiency synergies are expected from integrating ETG with RPM’s other tyre wholesale businesses.
“In addition, potential revenue synergies from cross-pollinating customer-bases and cross-selling ETG’s product range are expected.”
And indications are that RPM will continue with its consolidation strategy.
“We continue to evaluate further bolt-on and strategic acquisitions in line with RPM’s focused growth strategy,” Finkelstein says.
The company says that strategy remains on course, with organic business growth exceeding budget and further potential acquisitions in the pipeline.