Metair Investments Ltd (“Metair” or “the Group”), a leading international manufacturer, distributor and retailer of automotive components and energy storage solutions, today announced that it has entered into a sale of shares and facility agreement to acquire the entire issued share capital of AutoZone Holdings Proprietary Limited (“AutoZone”).
Paul O’Flaherty, CEO of Metair comments: “This acquisition of AutoZone presents a unique opportunity to expand and diversify Metair’s exposure to the aftermarket parts supply chain on the African continent. AutoZone is a well-known player in the Southern African automotive aftermarket with an established distribution channel through which to complement and extend Metair Group’s reach.”
AutoZone is a privately owned leading distributor of automotive parts, spares and car accessories in South Africa, with approximately 169 retail stores and 7 QSV stores. On 1 July 2024, AutoZone entered business rescue proceedings and the appointed business rescue practitioners are authorised and empowered to conclude the transaction, for and on behalf of AutoZone. AutoZone’s normalised management accounts reflect that as at 1 July 2024, net assets (excluding liabilities that are subject to the business rescue plan) was approximately R485 million (including net working capital of R421 million).
A key driver of the historical trading performance of AutoZone has been the impact of the significant funding on the balance sheet predominantly related to the leveraged buyout of the business, which impacted its ability to invest in working capital sustainably, ultimately impacting historical profitability. The total funding will be settled following implementation of the business rescue plan.
A maximum consideration of R290 million, payable in cash by Metair or its nominated subsidiary on the closing date, will be used to: settle AutoZone creditor and lender claims in line with AutoZone’s business rescue plan; acquire the sale shares for a nominal amount and fund R75 million in working capital requirements.
“We look forward to concluding this transaction as it aligns with Metair’s strategy of diversification in the mobility sector and will be a driver of value enhancing growth in line with the Group’s return criteria,” concludes O’Flaherty.
The transaction, which does not require shareholder approval, is subject to the South African competition authorities approving the transaction; Metair’s lenders consenting to the transaction; and counter-parties to certain AutoZone contracts consenting to the transaction.