CVC is selling UK auto parts retailer Kwik-Fit to Speedy 1, a company controlled by PAI partners, for £800m. PAI emerged victorious in an auction run by Deutsche Bank, edging out Japanese tyre manufacturer Bridgestone. Kohlberg Kravis Roberts, which bought German automotive parts retailer ATU for US$1.75bn last year, was also a player in the auction.
The result is significant given CVC’s current €6bn fundraising target. The firm bought 70% of Kwik-Fit in 2002 from Ford for £330m, which included £100m in equity. Management holds the remainder, and is expected to reinvest for a similar stake with PAI. Ford, advised by Goldman Sachs, had bought Kwik-Fit for £1bn in 1999, but has now exited its investment at a significant loss.
PAI in May bought FTE Automotive, a German maker of clutch systems for cars and light vehicles, from UK-based buyout firm HgCapital. It paid nearly US$500m for the business in its first German deal. PAI’s equity investment could come from its newly closed fourth fund, which raised US$3.5bn, a Continental European record.
Kwik-Fit is best known as an exhaust and tyre repair company, but could expand into windscreen repair, car air conditioning servicing and carrying out the mandatory Ministry of Transport annual tests of vehicles roadworthiness.
“Kwik-Fit has been an excellent investment for CVC,” said Rob Lucas, a partner at CVC. “Since our acquisition in 2002, the company has been transformed and is now delivering substantially improved financial performance. Kwik-Fit is well positioned for its next phase of growth.”
Founded in 1971, Kwik-Fit’s network encompasses 1,685 centres and 215 mobile units across the UK, the Netherlands, France (trading as Speedy) and Germany (trading as Pit-Stop)
Hamish Mackenzie, a partner at PAI, added: “Kwik-Fit has exceptional brand recognition in its key markets and benefits from significant growth prospects.”