UK private equity firm Montagu Private Equity has sold British Car Auctions (BCA), a vehicle remarketing business to Clayton, Dubilier & Rice (CD&R) for an undisclosed sum.
In October 2006, Montagu led the buyout of BCA from a collection of private shareholders. The business was divided into an operating company, which is being sold to CD&R, and a property arm that is being kept by Montagu.
With annual sales of £4bn, BCA has 45 remarketing centres spread across 12 countries. The company sells used vehicles ranging from nearly new and ex-lease stock to older and budget stock. It services the entire used vehicle buying community and had more than 70,000 buyers in the UK last year. The company mainly sells vehicles through physical auctions but has also begun an online business that is seeing great success that it predicts will continue into the future.
The company also provides additional services that include collections, deliveries, vehicle inspection, storage and vehicle preparation and cleaning.
In the past three years, under the ownership of Montagu, BCA has grown its sales and profit by more than 30%. This is the result of a successful investment programme into new sites, technology development and two strategic acquisitions.
Montagu’s private equity director, Wiet Stokhuyzen said: “BCA is a highly attractive business which has shown resilience and continued growth in spite of the recession. It is run by a talented and ambitious management team who have a clear vision for BCA and we expect the business to grow and excel. This transaction will generate a good return for Montagu’s investors and illustrates that there is a strong market for first-rate companies.”
As part of the sale, CD&R’s London-based partner Fred Kindle will serve as chairman of BCA. Jon Olsen, BCA’s chief executive officer will remain in the same position.
CD&R recently completed investments in JohnsonDiversey, a provider of commercial cleaning, sanitation and hygiene solutions, part of a broader recapitalisation of the company valued at US$2.6bn, as well as a US$250m investment in NCI Building Systems, a US-based manufacturer of metal products for the non-residential building industry.
Montagu was advised by UBS Investment Bank. Bank of America, Merrill Lynch, BNP Paribas Fortis, Commerzbank, HSBC, Investec, Lloyds TSB, Bank of Ireland and Royal Bank of Scotland acted as arrangers of the debt financing.