Bapcor receives $1.83bn buyout offer from Bain Capital

Bapcor, the automotive parts retailer, disclosed on Tuesday morning that it has received a buyout proposal from Bain Capital. The offer was made at $5.40 per share.

Offer snapshot

  • Deal value: $1.83 billion
  • Deal multiples: N/A
  • Deal type: Buyout
  • Investors: Bain Capital

Bapcor operates under the Autobarn, Autopro, Burson, and Midas brands with over 1100 outlets. It caters to both mechanics and motoring enthusiasts. The company was under private equity ownership by Quadrant from 2011 to 2014, before it went public on the ASX. Bapcor was formerly known as Burson Group until 2016 and debuted on the ASX at $1.82 in 2014. Recently, the company has been compelled to downgrade its profit forecasts multiple times due to operational challenges.

After the announcement, Bapcor shares surged by 11.2% to $4.85, although they were significantly higher at above $7 last year. The company has been struggling with profitability, leading to a drastic 35% drop in share value in one day in May after a profit warning, erasing over $500 million in market value.

Garry Johnson, one of Bapcor’s co-founders and a major investor, criticised the proposed acquisition price as too low. He highlighted the potential of the company if managed effectively, expressing disappointment over its current predicament.

Competitors like Repco and Supercheap Auto have been gaining market share, according to Jarden's analysis. Bain Capital, the prospective buyer, owns several significant Australian businesses, including Virgin Australia and Accolade Wines.

In terms of leadership, Bapcor saw a change when Noel Meehan took over as CEO and initiated a strategic review with McKinsey & Company, aiming for a $100 million profit boost by 2025. However, following disappointing results and Meehan’s departure, the company announced Paul Dumbrell as the new CEO, who changed his mind one day before he was meant to start.

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