RPM AUTOMOTIVE GROUP STRENGTHENS NQ PRESENCE
The group has announced three strategic growth transactions
RPM Automotive Group Limited recently announced the acquisitions of Queensland businesses, Carline Automotive – Cairns, Carline Automotive, and Revolution Racegear – Townsville and leased a new warehouse.
The businesses have been integrated into RPM’s Performance and Accessories Division, effective 1 August 2021, while the FNQ warehouse expands RPM’s distribution footprint.
“Providing a seamless customer experience serviced by our specialist staff across all our integrated brands is key to the success of RPM Automotive Group,” RPM Chief Executive Officer, Clive Finkelstein, said.
“The recent acquisitions of Carline Automotive – Cairns and Carline Automotive and Revolution Racegear – Townsville are great examples of our next expansion phase, purchasing some of our franchisees and members as part of our forward integration plan.
“While opening the RPM Autoparts Townsville distribution centre enable us to improve our store supply capability in Far North Queensland. Our new warehousing facility is fully equipped to support our vertical integration model and house the breadth of products we offer.
“The acquisitions of Carline Automotive – Cairns and Carline Automotive and Revolution Racegear – Townsville (a Carline Group subsidiary) is part of our strategy outlined in our prospectus to acquire several Carline automotive outlets in the medium term and provides an opportunity to add further value to the businesses through revenue synergies from cross-selling products, and cost synergies from the scale benefits of a larger RPM Group.
“The acquisitions are value and earnings per share accretive, and well-funded from existing cash balances and share issues follow RPM’s recent capital raising. We continue to evaluate further bolt-on and strategic acquisitions in line with RPM’s focused growth strategy.”
The acquisitions are strongly aligned with RPM’s existing strategy of expanding the business through accretive acquisitions.
The combined retail businesses are forecast to generate $3.5 million in revenue and $525k in EBITDA in FY22. The two businesses will contribute around 15 percent to the Repairs and Roadside Division in FY22.
RPM Autoparts Townsville distribution centre is expected to generate $3.75 million in turnover and over $300k in EBITDA in its first 12 months of trading (expected opening date 1 October 2021).
The total purchase price is $500k, with consideration comprising of $125k cash and $375k in RPM shares (valued at RPM’s 60-day weighted average price from signing of the sale and purchase agreement). The cash payments will be funded from RPM’s existing cash reserves.
RPM also recently announced that it has executed an agreement with Collins St Value Fund (CSVF) for an equity placement of $2,500,000 at 30 cents per share, a slight premium to the current share price.
For more information, visit www.rpmgroup.net.au