Overview
Client: PARts Australia Pty Ltd
Opportunity: A long-time client of HLB Mann Judd Sydney, Carthona Capital was a significant investor in PARts. They met the Sydney advisory team to discuss exit opportunities as it had grown and was ready to transition to a larger organisation.
Transactions can be distracting from daily operations so the Sydney advisory team was engaged to provide support and lead the process.
Outcome: PARts was acquired by GPC Asia Pacific, the largest automotive aftermarket parts supplier in Australia and New Zealand with well-known brands such as Repco, Napa and Sparesbox.
The brief
Carthona Capital a long-standing client of HLB Mann Judd Sydney and a significant investor in PARts Australia Pty Ltd met with the advisory team to discuss exit opportunities for the PARts business. The CEO had built a great business and had been approached by a potential acquirer that was keen to continue accelerating the business to reach its full potential.
Simon James and Warrick Oakes at HLB Mann Judd Sydney were engaged to assist the CEO and Board in exploring their exit opportunities.
How HLB Mann Judd helped
With extensive experience in providing strategic advice on transactions and running the exit process, HLB was the perfect fit for both PARts and Carthona Capital.
Following initial conversations with all parties, selling the business as a whole was the preferred outcome for both PARts and Carthona Capital. After understanding the preferred outcome, the team created a company briefing paper and flyer which was disseminated to agreed parties to understand if there was positive market sentiment for the transaction. From there, a further shortlist of interested parties was collated and confidential discussions were held with these parties.
PARts and Carthona were consulted throughout the process and through this collaboration a preferred acquirer was selected that aligned most closely with PARts’ ambitions. A term sheet was negotiated upfront which included detailed transaction parameters so there were no surprises or late negotiations that could hinder the deal completion.
During this phase HLB worked with the PARts CEO to collate PARts’ financial, operational, tax and legal information in readiness for due diligence, which consisted of information an acquirer would likely request based on our experience. HLB maintained the virtual dataroom to securely share this information – this reduced the time burden for management as well as presented the information in a consistent way to improve efficiency for the acquirer.
Providing overall project management to ensure continued progress against the agreed timeline which ran for approximately two months. HLB has a significant team of specialists throughout the firm who assisted with all the technical aspects of a deal and our tax specialists provided advice to ensure the best tax outcome for our client was achieved.
As experienced advisers, Simon and his team were able to proactively identify and respond to transaction hurdles and a successful outcome was achieved by both parties.
“I didn’t realise how much I needed the HLB Mann Judd team until I did. Warrick, Natalie, Simon and the team helped us in many ways keeping us focused on the outcome while being very supportive. I would very happily recommend them.”
Jim Guriff, CEO and founder PARts Australia Pty Ltd
The result
PARts was acquired by GPC Asia Pacific, the largest automotive aftermarket parts supplier in Australia and New Zealand with well-known brands such as Repco, Napa and Sparesbox. PARts strategically complimented and extended GPC Asia Pacific’s brand and service offering.
Importantly, the terms of acquisition were closely aligned with both the founder and Carthona while satisfying critical requirements of an acquirer. This is one of the more complex aspects to balance for any external advisor and the HLB Mann Judd team helped negotiate the preferred exit strategy that preserved the founders core goals and mission for the business going forward. This also includes helping communicate the value opportunity and potential to the acquirer leading to a win-win outcome for all sides. Further significant growth potential for the acquirer, PARts and its founder was a core part of the strategy and successful outcome.
About PARts Australia Pty Ltd
PARts was established in 2015 in Sydney and specialises in the automotive parts aftermarket, particularly the data systems and technology that power parts, service and business intelligence in existing legacy and growing online markets.
What does that mean? If for example you want a new part for your car say a new exhaust for a 2012 Volkswagen Golf 2.01 – the PARTts technology matches what exhaust systems will fit your car. PARts partnered with TecAlliance, an international driving force behind data, processes and integrated solutions in the automotive aftermarket. PARts continues to be a trusted and impartial data repository with the technological expertise.