04/06/2021 - 14:30

Stealth shares soar on $4.2m acquisition

04/06/2021 - 14:30


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Distribution services provider Stealth Global expects to grow its revenue by about $18 million, following the acquisition of Skipper Transport Parts from Eagers Automotive.

Stealth shares soar on $4.2m acquisition
Skipper Transport Parts is being acquired by Stealth Global Holdings for $4.2 million. Photo: Facebook

Distribution services provider Stealth Global Holdings expects to grow its revenue by about $18 million, following the acquisition of Skipper Transport Parts from Eagers Automotive.

Stealth, based in Stirling, says the acquisition will provide the company with significant exposure to customers in the automotive, truck and trailer, mining, bus, agriculture, and industrial maintenance sectors in Western Australia.

STP currently operates at stores in Perth, Albany, Esperance, Karratha, and Port Hedland, with a further 12 on-site store operations at customer locations across WA and in Queensland.

Stealth will gain about 1,250 customers and 300 suppliers from STP, as well as 34 employees.

Its share price rose 21 per cent on the news, closing at 12 cents on Friday.

Led by managing director Michael Arnold, Stealth expects its acquisition of STP will deliver about $18 million in revenue and $1.1 million in underlying earnings within the first year.

Stealth recently reported first-half revenue of $30.4 million and underlying earnings of $2.1 million.

The business will pay $4.2 million in cash to Eagers Automotive subsidiary AMCAP – comprising $3.25 million upon completion and $950,000 payable within three months.

“The acquisition of Skipper Transport Parts fits Stealth’s stated strategy to expand its business through disciplined organic and acquisition growth plans,” Mr Arnold said.

“The STP purchase and merger is transformational in terms of a significantly expanded product and high-touch solutions offering, distribution supply chain infrastructure, eCommerce platform and deeper customer and supplier relationships.”

He said STP’s physical brand and onsite stores network would strengthen Stealth’s market position.

“STP is highly regarded as a market leading business in Western Australia and for its onsite solutions to customers,” Mr Arnold said.

“The depth of STP’s wide-ranging industrial MRO products… will give the merged group significantly more scale and leverage from its distribution platform, branch store footprint, network reach, buying power and its broad in-stock product offering where Stealth can hold an advantaged market relevant position.

“Stealth is well positioned to continue growing its business and capitalise on investment and growth opportunities over coming years, with a focus on capital discipline.

“This is underpinned by our expanding diversified business portfolio, resulting in a steady flow of recurring sales activity.”

Stealth expects to complete the STP acquisition on July 31.

It follows the purchase of industrial workplace and hardware supplies specialist C&L Tool Centre in November last year.

Stealth also owns subsidiaries Heatleys and ISG.


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