Apax exits Rhiag in €1.04bn trade sale

The transaction is expected to close in Q2 2016 - it is subject to the customary closing conditions and regulatory approvals. The purchase price equates to roughly 10x Rhiag's EBITDA, which is believed to have amounted to around €103m in the most recent financial year.

LKQ is a US-headquartered provider of parts to repair and accessorise motor vehicles. It views the acquisition as a way to expand its presence in Europe, adding 10 countries to the ones in which it is currently active, and to consolidate a market it considers to be highly fragmented.

LKQ will initially finance the acquisition via its revolving credit facility - the company had around $1.3bn available on its credit facility prior to the transaction - and by assuming Rhiag's debt.

Previous funding
Apax acquired Rhiag in a tertiary buyout from Alpha in 2013, a deal that was supported by a €415m bond issue. Alpha had originally bought the business from CVC Capital Partners in 2007.

A trade sale was not the only option on the table for Apax, with a dual-track process being pursued from Q3 this year. Rhiag applied to the Italian securities and exchange commission Consob for permission to float back in early October.

A potential flotation was a the time expected to value Rhiag at up to €1bn, broadly in line with the EV secured in the trade sale to LKQ.

Throughout its history of private equity ownership, Rhiag has consistently undertaken an acquisitive growth strategy, having acquired Alcedo portfolio company Era in a deal worth €32m in 2014, as well as Czech car parts distributor Auto Kelly in August 2010. The group also owns the Bertolotti, Elit and Lang brands.

Company
Founded in 1962 and based in Milan, Rhiag is a B2B distributor of aftermarket spare parts for passenger cars and commercial vehicles. The company has operations in Italy, the Czech Republic, Switzerland, Hungary, Romania, Ukraine, Bulgaria, Slovakia, Poland and Spain. It operates through 247 distribution centers and 10 warehouses, serving 100,000 clients.

Rhiag generated revenues of €882m in the 12 months to September 2015.

People
Frank Ehmer led the deal for Apax Partners. Luca Zacchetti is the CEO of Rhiag.

Advisers
Vendors - JP Morgan (M&A); UBS (M&A).
Acquirer - Bank of America Merrill Lynch (M&A).

 

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