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- RPM Automotive Group (RPM) acquires two specialist tyre businesses, Victoria Wide Tyre Service (Vic Wide) and ACT Total Tyres (ACT Tyres), expanding its Repairs and Roadside Division
- RPM will pay a total of $7.67 million to acquire both businesses and is anticipated to generate over $43 million in sales while RPM grows to in excess of $100 million sales on an annualised basis
- The acquisition of Vic Tyres is expected to be complete on May 1
- RPM shares are up 3.70 per cent, trading at 28 cents
RPM Automotive Group (RPM) has acquired two specialist tyre businesses, Victoria Wide Tyre Service (Vic Wide) and ACT Total Tyres (ACT Tyres), expanding its Repairs and Roadside Division.
Under the acquisition, RPM will pay $6.8 million for Vic Wide, split between 65 per cent in cash and 35 per cent in RPM shares equivalent to the 60-day volume-weighted average price (VWAP) at the date of settlement.
Consideration will be paid 50 per cent on completion and the balance a year after.
For the acquisition of ACT Tyres, RPM will pay $870,000, split 50 per cent cash and 50 per cent in RPM shares at an issue price of 28.1 cents, the equivalent to the 60-day VWAP from April 1.
Consideration will be paid 50 per cent on completion, 25 per cent after a year and a further 25 per cent after two years.
“With over 70 years of combined experience between Vic Wide and ACT Tyres management, they will support RPM continuing to provide above industry service standards to our customers,” CEO Clive Finkelstein commented.
“These acquisitions enhance RPM’s Network Effect, as we increase the number of customers we provide services to while also improving our service capabilities.
“Once integrated into the RPM Group, both businesses will provide significant cost synergies and be immediately value and earnings per share accretive to deliver value for our shareholders.”
Mr Finkelstein also mentioned that the company’s Repairs and Roadside Division will now comprise of seven businesses, operating out of 12 locations and is anticipated to generate over $43 million in sales while RPM grows to in excess of $100 million sales on an annualised basis.
The acquisition of Vic Tyres is expected to generate further operational synergies to RPM of over $350,000 per annum and will complete its acquisition on May 1.
RPM has already acquired ACT Tyres and is expected to generate earnings before interest, tax, depreciation and amortisation (EBITDA) of $300,000, consistent with RPM’s growth strategy.
RPM shares were up 3.70 per cent, trading at 28 cents at market close.
