Capital Smart buy to create synergies and gives impetus to strategy
The vehicle crash repair sector consolidation process has hit a new high with AMA Group snapping up 90 per cent of insurer Suncorp’s interest in hefty market player, Capital Smart.
The $440 million “binding agreement” deal includes ACM Parts going AMA’s way for $20 million and it follows AMA’s consolidation action in the truck-repair space.
Significantly, given AMA’s focus on direct deals with insurance firms, Capital Smart will be a recommended repairer for Suncorp customers for up to 25 years – 15 years with two five-year options for Suncorp, the second largest motor vehicle insurer in Australia, to extend.
Read our report on AMA buying up truck smash repairers, here
AMA Group CEO Andrew Hopkins notes the deal combines Capital Smart’s low to medium severity panel repairs with AMA’s industry leading platform across the smash repair market and says it “further strengthens our long-standing close relationship with Suncorp”.
For Suncorp, the timing was right as the business “has grown to be one of Australia’s largest networks of smash repairers for driveable repairs which has reached an inflection point under Suncorp ownership”, according to Suncorp CEO insurance Gary Dransfield.
AMA reckons the deal will give it around 10 per cent of the metropolitan driveable repair market, “ensuring significant opportunity for future growth”.
ACM throws an integration aspect into the mix.
It is described as Australia’s largest recycler of panels and mechanical parts for the automotive industry.
“As part of a direct procurement, sales and distribution model, ACM sources, warehouses, sells and delivers its products directly to both collision and mechanical repair shops as well as selling complete vehicles into the recycler and scrap metal markets,” AMA says in a market presentation.
“It offers a wide range of products including recycled and new parts with a focus on major mechanical components and light collision repair parts.”
The deal is due to be finalised on October 31.
Meanwhile, AMA, presently undergoing a trading halt on the stock exchange, will face a market-sentiment test of its strategy as it launches a $216 million capital raising exercise.