RPM, which bought the business for $3.3 million including $2 million of inventory, said Chapel Corner Tyres generated $18.5 million in revenue and $900,000 in EBITDA in FY23.
It said the purchase was a “strategically aligned acquisition that provides scale to the wholesale tyre division through its strong passenger and 4×4 wheel and tyre offer and minimal customer overlap, providing significant cross-sell opportunity of broader RPM product range to an expanded customer base.”
It will give RPM potential cost synergies of up to $500,000 through consolidation of metro Victoria distribution, increased warehouse facilities, shared services (occupancy, HR, and logistics), access to new customers, and greater coverage of Victoria through more effective use of resources.
It will also provide significant cross-sell opportunities of the broader RPM product range to an expanded customer base, the company said.
Chapel Corner Tyres was started in 1976 and operates as an automotive parts wholesaler and retailer with its headquarters in the southern Melbourne metropolitan area.
RPM has a national presence in the automotive aftermarket and has business units selling wheels, tyres, accessories and apparel across wholesale and retail customers, with key brands including Revolution Tyre Services, Revolution Racegear and RPM Autoparts.
Chapel management will be retained.
RPM CEO Clive Finkelstein said: “This is a great acquisition for RPM that meets our strict criteria for best-in-class service, industry knowledge and a strong cultural alignment with the RPM Group.
“Chapel Corner Tyres has a great reputation for customer service honed over nearly half a century, which we can leverage across our national network.
“We look forward to welcoming the high-calibre team along with their resources and warehousing capability which will strengthen our wholesale platform initially in Victoria, and then nationally. In addition, our aligned strategic ambitions will strengthen our competitive position.”
Chapel Corner Tyres’ CEO Stephen Nash said, “We are excited to join RPM’s growing network as it will enable Chapel Corner Tyres to benefit from RPM’s national infrastructure to access a wider range of customers for our quality range of wheel and tyre products.
“The entrepreneurial spirit across both our businesses is aligned with a strategic vision to continue scaling our wholesale operations, whilst continuing my family’s legacy in the industry.”
The acquisition is an asset purchase agreement, with a total purchase price of $3.3 million.
Consideration will be 50 per cent cash and 50 per cent in equity.
By Neil Dowling