Hot on the heels of its purchase of a Queensland automotive parts business, Coventry Group has announc-ed its acquisition of Northern Territory-based Independent Motor Mart for $8.75 million. And it is on the lookout for more buys.
Coventry CEO Chris Glenn said the IMM purchase, together with its Queensland acquisition, demonstrated the group’s commitment to seeking new growth opportunities.
IMM has four outlets in Darwin and one at Katherine.
The business is forecast to achieve operating revenue of $9.7 million and earnings before interest and tax of $1.1 million for the 2004-05 financial year after acquisition costs are added back.
The acquisition represents Cov-entry’s first move into the Northern Territory automotive parts market.
It adds to the group’s existing automotive parts distribution activities in Western Australia, South Australia, Queensland and New South Wales.
Last week Coventry acquired Queensland-based automotive parts distribution businesses, Thompson’s Spare Parts and Rod Smith Parts & Bearings.
The purchase, which is from a single vendor, was undertaken by Coventry Auto Parts Pty Ltd, a controlled entity of the Coventry Group.
The acquisition, gave Coventry four outlets located in south-east Brisbane and on the Sunshine Coast and makes it the second largest player in the Queensland auto parts distribution market.
Mr Glenn said the price for the Queensland acquisition was confidential but the upside from the deal would exceed the company’s 12 per cent after tax return on shareholder funds.
First-year operating revenue from the newly acquired business will exceed $10 million with pre-tax earnings of $900,000 after adding back acquisition costs.
Mr Glenn said Coventry had been struggling in the Queensland and New South Wales markets due to a lack of scale.
"This [acquisition] gives us more scale [in Queensland]," he said.
That leaves the New South Wales market and Mr Glenn said Coventry was yet to find a suitable acquisition target.
The latest acquisitions are Cov-entry’s first since it undertook a buying spree in 1991.
Back then the company acquired Construction Engineering Systems, Hylton Parker Fasteners – New Zealand and certain branches of Ramset Fasteners.