AUSTRALIA could have its third public automotive company after Peter Warren Automotive said it was considering a float that would be valued at up to $2 billion.

PWA is the merger made in 2017 of nine Peter Warren dealerships in Sydney and Queensland and 11 sites of James Frizelle’s Automotive Group in Queensland together under the umbrella of equity capital investor Quadrant Private Equity.

The plans will start this week with a roadshow for investors to outline the proposal with a view to list the company around the middle of this year.

Frizelle Automotive Prestige chief operating officer Rebecca Frizelle confirmed to GoAutoNews Premium that PWA shareholders were considering additional sources of capital for growth, including an IPO “as a means of supporting PWA’s growth”.

But she said that “no formal decision has been made regarding any potential IPO.”

Reports have stated that investment banks Morgan Stanley, Jarden Australia and Jefferies Australia have been hired for the listing of PWA.

Quadrant, based in Sydney, is believed to have signalled a public listing when the car market improved.

The market recorded three years of flagging sales but in November and December 2020, sales soared with 12.4 per cent and 13.5 per cent respective increases on the same period in 2019.

Dealers are reporting to GoAutoNews Premium that they are seeing margins on new cars reminiscent of levels not seen since the 1970s and 1980s because they are selling cars in short supply.

Peter Warren Automotive started in 1958 and now operates in nine locations in Sydney and Queensland. It has a diversified portfolio of 22 car brands, including Mercedes-Benz and Ford.

James Frizelle’s Automotive Group was established in 1985 and is one of the largest motor vehicle dealers in Queensland. It sells more than 15,000 new and used vehicles a year and has 11 new-vehicle brands operating from six sites in South East Queensland and Northern NSW.

PWA sells about 30,000 vehicles a year and has sales revenue of about $1.3 billion.

The company is said to have appeal to investors not only because of the recovery of the car market, but because – like much of Eagers Automotive – the business includes property ownership.

The group’s proposed listing will make it Australia’s third automotive retailer in the public market.

It joins Eagers Automotive Ltd (formerly AP Eagers Ltd and the merger with Automotive Holdings Group Ltd) and Autosports Group Ltd.

Eagers has estimated that its half-year results to December 31, 2020 will show profit before tax of about $200 million. Autosports has indicated that for the same period, it will have revenue of about $905 million and profit before tax of about $29 million. Both will release audited figures later.

By Neil Dowling