Automotive Solutions Group (ASG), chaired by former Mitsubishi Motors Australia Ltd managing director Tom Phillips and with experienced corporate executive Tanya Mason as CEO, plans to raise $25 million through the issue of shares at $1 each. When listed early next month, the company will be capitalised at $45 million.
Ms Mason is finalising a national tour to attract investors to the company. It has been so well received that the tour has been shortened on indications ASG may be well over subscribed – a position similar to the recently listed automotive retailer Autosports Group Ltd that was oversubscribed 10 times.
ASG will be a competitor to the market leader, ARB Corporation, that is also listed on the Australian Securities Exchange.
ARB has seven per cent of Australia’s total 4WD and SUV retail and manufacturing market and is capitalised at $1.4 billion.
ASG aims to increase its share by combining eight Australian businesses under its umbrella, targeting the booming private and fleet 4WD vehicle markets.
The new company will source income from these businesses that operate through a national network and service retail, trade and fleet customers including supplying and fitting aftermarket parts and accessories, providing mechanical and auto electrical servicing, as well as motor sport and performance services including holding the NSW and ACT licences for Walkinshaw Performance products.
It is also involved in manufacturing, importing and wholesale operations of major industry brand name products in the 4WD and SUV segments.
The eight 4WD-focused businesses, which will be issued shares representing 12 per cent of the listed company plus cash of $21 million, are Barden Fabrications (Victoria); Umhauers (Victoria, retail supply and fitment); Roo Systems (Qld, national diesel specialists with 40 outlets); TransSpec 4×4 (Qld, fabricators); Alloy Motor Accessories (Qld, fabricators), Dolium (WA, niche retailer); Deering Autronics (WA, auto electrical and airconditioning specialists); and JDR Motorsports and 4×4 Enhancements (NSW, ACT, Walkinshaw reseller and performance modifications).
All business will retain their identity though ASG indicates synergies between the eight will streamline opportunities and expand potential revenue.
ASG said it has identified growth opportunities and cost efficiencies including growth from increased network distribution, in-house centralisation of services previously outsourced to third parties, supply chain efficiencies, volume and product pricing economies, sharing of intellectual property and expansion and growth of existing online presence.
The ASG prospectus states that the eight businesses generated $39.9 million in the 2016 financial year and is now forecast to have revenue this financial year of $42.7 million.
By Neil Dowling