Its current management and NBGI Private Equity, in a £49m secondary buyout transaction, have sold Nationwide Autocentres, a UK-based MOT and car servicing specialist. The acquirer is Phoenix Equity Partners who beat off strong competition to acquire the business. The deal makes a return of 10x money and an IRR of 72% per annum over five years.
NBGI Private Equity backed Tom Dunn (managing director), David Staniland, Roy Mitchell and Gwyn Jones in the management buy-in of 41 vehicle service centres from Lex Autocentres in January 2001 for an undisclosed sum. The Lex Autocentres network was previously managed as part of Lex Service subsidiary RAC. The management team was subsequently strengthened by the appointment of Jim Cooper as finance director and Alan McWalter, the former M&S Group marketing director, as non-executive chairman.
As part of the secondary buyout, Duncan Wilkes, Bill Duffy and Andy Stevens have been recruited by Phoenix to join the company as chief executive officer, chief operating officer and chief financial officer, respectively. The three had previously worked together at the RAC, where they had a strong track record of improving customer service levels, building and marketing brands and developing corporate relationships.
Tom Dunn, outgoing chief executive of Nationwide, said: “With NBGI Private Equity’s active support over the last five years we have grown Nationwide Autocentres into the UK’s leading car repair specialist. I am proud to have led and been part of the team that has accomplished this achievement. Nationwide is now poised for further growth and we wish the new management and owners success in taking the business to the next stage.”
NGBI employed a classic buy-and-build strategy in a traditional UK industry sector. The strategy included acquiring branches from RAC plc in April 2002, Kwik-Fit in February 2003 and the AA in November 2004, all with further equity funding from NBGI Private Equity.
The company bought 96 vehicle service centres from Lex Service subsidiary RAC in 2002 in a £5.4m deal. The following year the business continued its expansion programme with the addition of 54 Stop ‘n’ Steer centres with approximately £12m in annual revenue from Kwik-Fit. The value of that transaction was undisclosed. And in 2004, the business completed the purchase of 50 service centres from the AA. Following this deal all Nationwide centres became “AA Approved Service Centres”, providing recovery points for AA patrols and fleet maintenance for the AA’s own vehicles as well as being recommended by the AA to its members and customers.
The business now operates from 213 technical autocentres, with over 600,000 customers and provided over 250,000 MOTs in 2005, making it the UK’s largest MOT tester.
Nationwide Autocentres has won numerous awards for its services, including Repairer of the Year in both 2003 and 2004 and its rapid growth story led to inclusion in the 2005 Sunday Times FASTRACK 100 list of companies.
KPMG Corporate Finance advised NBGI Private Equity and management on the sale. Mark Owen, director of NBGI, said: “The management team under Tom Dunn’s leadership has transformed several underperforming businesses into what is now the strongest and most trusted car repair company. We are pleased that, by working closely with Tom and his team, including financing the initial turnaround and acquisitions, the investment has been a great success for all involved. This is typical of the ‘traditional economy’ businesses we target and the highly competent management teams we seek to work with.”