Rapidly advancing automotive industry conglomerate, AMA Group, remains on track to produce some serious cash flows during the next couple of years on the back of its aggressive strategic acquisition strategy – which includes the recent $440 million purchase of the Capital S.M.A.R.T panel repair business and ACM Parts.
The company says it is currently negotiating to take over businesses with a combined annual turnover of more than $100m and beyond that has identified a further potential pipeline of takeover targets that collectively boast an additional $200m in turnover.
The company is confident that three recent acquisitions - Smash Care, Diplocks and All Transport - will provide it with around $30 million in revenue and deliver an EBITDA of $2.5 million.
AMA Group also expects to deliver a normalised EBITDA during the 2020 financial year, excluding transaction and integration costs, of between $73m and $77m.
Over the past year the company turned over $616 million, reflecting a year-on-year growth of 21%, whilst enjoying a normalised EBITDA of $58.2 million, which itself represented a year-on-year increase of some 12%.
During this time its net profit after tax was $22 million, up 44% on the previous year, with earnings per share also hiking by 4 cents, year-on-year representing an impressive jump of 38.9%.
While AMA Group is constantly on the lookout for new acquisition opportunities, it was its integration with Capital S.M.A.R.T and ACM Parts during the December quarter which really put it into another league.
These acquisitions saw it knocking on the door of the billion dollar market cap club and the $17m in synergies that it identified during the takeover period look like they will most likely come to fruition by FY21 according to management.
It also now well placed to crash through the $1 billion revenue target for the 2021 financial year.
Capital S.M.A.R.T, which serviced almost 180,000 vehicles in Australia and New Zealand during the past financial year, brought with it 50 panel and repair outlets across both countries - primarily in metropolitan areas.
ACM Parts is Australia’s largest recycler of panels and mechanical spare parts for the automotive industry.
To both facilitate the acquisition of Capital S.M.A.R.T and ACM Parts and enable future growth opportunities, AMA took on a $375 million banking facility that was underwritten by the ANZ and NAB back in October.
Under the terms this arrangement, the banks have syndicated part of the facility to a group that includes five new lenders.
According to AMA Group, this syndication was well supported and oversubscribed, with the facility currently drawn on a net basis to around $235 million.
The company said this week that its acquisition pipeline remained very much alive, with there being no upward pressure on acquisition multiples.
AMA Chief Executive Officer and prime mover, Andy Hopkins said: "We have now completed our senior management structural changes with the most recent addition being the appointment of Darrel Maloney as head of acquisitions to lead the group’s acquisition program.”
"Darrel comes with extensive commercial and industry experience and most recently has been CEO of Strategic Collision Repair, a smash repair consortium.”
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By Matt Birney
