Positioning

RPM Automotive Group strengthens position in 4WD accessories market with acquisition – Proactive Investors Australia

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12:36 Mon 30 May 2022
RPM Automotive Group delivers another record quarter with revenue up 48.5%
RPM believes the deal will expand its vertically integrated offering in the automotive afterparts industry across design, manufacture and wholesale distribution.
RPM Automotive Group Ltd (ASX:RPM) has acquired a new business in a bid to expand its vertically integrated offering into the fast-growing 4WD accessories market.
The ASX-lister has picked up AFT Automotive Group, which includes Equipit Group, a leading wholesaler of 4WD accessories, and All Terrain Design, a leading designer of 4WD motor vehicle accessories.
RPM says the latest buy will expand its vertical in the automotive afterparts industry across the design, manufacture and wholesale distribution hubs.
The company will acquire AFT for $2.4 million in a 50/50 cash and shares deal, reflecting an average earnings before interest, taxes, depreciation and amortisation (EBITDA) multiple of 3.75x.
This acquisition is expected to be earnings-accretive from the get go.

Speaking to the buy, RPM CEO Clive Finkelstein said: “This is a strategically important acquisition for RPM, strengthening our position in the fast-growing 4WD accessories market and significantly expanding our vertically integrated offering in the automotive afterparts market through enhanced capabilities in design and manufacture.
“The continued expansion of our wholesale business complements our strong retail accessories distribution through greater product range and supply chain control.
“This acquisition complements our Formula Off Road business, which manufactures 4WD products, through enhanced design capabilities and streamlined manufacturing processes.
“In addition, we have successfully worked with the management team over many years, and we are confident in the growth opportunities ahead.”

AFT’s Equipit Group owns the MAX 4X4 accessories arm — a leading brand in the industry, delivering bull bars, side steps and rails to 4WD owners.
RPM says the MAX brand has developed a strong reputation for quality accessories that are great value and easy to fit.
AFT’s other business, All Terrain Design, is a design company specialising in motor vehicle accessories, predominately for the 4WD industry.
All Terrain uses market-leading technology to provide a range of services, including 3D scan tooling, CAD and technical drawing, and custom design work for new products.
The offshoot owns and controls the design and manufacture of all MAX 4×4 Accessories.
The vendors behind the AFT buy commented: “We are very pleased to be joining RPM in order to support the next phase of our growth.
“We have previously worked with Clive in building a successful business in this industry and we are excited about the opportunity to unlock the growth potential of the combined entity. We will be able to leverage the existing RPM infrastructure to expand our wholesale operations while driving sales through RPM’s distribution network.”
RPM believes today’s deal provides opportunities for cross-selling within the company’s accessories division and for improved operating leverage.
What’s more, Equipit’s wholesale product range in 4WD accessories complements RPM’s existing retail accessories business.
In addition, RPM will expand Equipit’s wholesale operations from Queensland to a national footprint by leveraging RPM’s existing infrastructure throughout Australia.
Meanwhile, the acquisition of All Terrain Design’s capabilities in specialised design will open opportunities for greater design work internally, as well as for external customers.
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The above has been published by Proactive Investors Limited (the “Company”) on its website and is made available subject to the terms and conditions of use of its website (see T&C ). …
RPM Automotive Group Ltd (ASX:RPM)'s Clive Finkelstein speaks with Proactive following the news they've acquired a new business in a bid to expand its vertically integrated offering into the fast-growing 4WD accessories market. It's picked up AFT Automotive Group, which includes Equipit Group, a…
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