Repco Takes Private Road To Repair
The Age
Tuesday December 12, 2006
CAR parts wholesaler and retailer Repco has given up the battle to repair its badly mauled finances under the gaze of an unforgiving sharemarket and agreed to a $336 million private equity deal.
CCMP Capital Asia will take Repco private in a $1.75-a-share offer just three years after the company was relisted in a $405 million fund-raising by a consortium of three other private equity firms. Gresham Private Equity, GS Private Equity and Macquarie Direct Investment had engineered a management buy-out of the company from former parent Pacific Dunlop for $251 million in September 2001. After expanding to a chain of 450 shops across Australia and New Zealand, Repco encountered financial turbulence a year ago as sales slowed. The problems resulted in the managing director who led the buy-out, and then the float, to quit earlier this year. Graeme Yeomans was appointed in May to turn around the struggling company. Greg Laurie, who took over as chairman just a month ago, said last night Repco had received "alternative and confidential" approaches to buy the company over the past few months. He said while the company still thought its restructuring program would be successful, he admitted it would take some time and would be the subject of market uncertainty. The offer from Hong Kong-based CCMP gave shareholders an opportunity to sell at a reasonable price, he said. Repco, which expects to make a profit of $66 million this year, had asked for its shares to be suspended on Friday at $1.44, after its stock rose 9 per cent in a day of takeover rumours. CCMP will buy Repco through a scheme that requires shareholder, court and Foreign Investment Review Board approval. The bid values Repco at $570 million, including debt.
© 2006 The Age
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