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Johannesburg - US buyout firm Carlyle Group and the private equity arm of insurer Old Mutual have agreed to buy South African tyre retailer Tiger Automotive from Ethos Private Equity, Ethos said on Wednesday.
The deal, still subject to approval from the South African competition regulators, is for an undisclosed sum, said Ethos.
This marks the first acquisition for Carlyle's $700m African fund in SA.
Ethos originally acquired TiAuto in 2008, delisting the business from the JSE in a transaction valued at approximately R1.0bn.
Over Ethos’ investment holding period, TiAuto has grown significantly. Tiger Wheel & Tyres retail stores have increased from 52 in 2008 to 86 currently. Tyres & More retail stores successfully launched in 2013 and now have 18 stores.
A new battery line has been launched, the Hankook licence secured and successfully distributed through the wholesale division and the GT Radial Licence secured for distribution through the wholesale division.
“For a number of years, Ethos has been receiving unsolicited offers for TiAuto. This is testament to the quality of the business, management team, and staff. We are proud of our partnership with management and have been fully supportive of the growth initiatives which have underpinned TiAuto’s impressive performance, most especially during some challenging market conditions,” said Ethos partner Shaun Zagnoev in a statement issued on Wednesday.
Alex Taplin, TiAuto CEO said private equity ownership has been a positive experience for TiAuto.
"We have enjoyed a constructive collaboration with Ethos, over which time we have worked together to strategically enhance our business and grow operationally. We are a better, more sustainable business today than we were six years ago. Much of this value can be ascribed to the professional and supportive style that Ethos has demonstrated during their time with us," said Taplin.
"This is why management has been so supportive of partnering with private equity shareholders again. Carlyle and OMPE represent a wealth of expertise which will dovetail perfectly with management's future vision and growth ambitions for the group.”
On conclusion of the transaction, the acquiring consortium will hold 100% of TiAuto’s share capital. TiAuto’s current senior management team will form part of this shareholding.
TiAuto holds a leading market position in the wheel and tyre retail and wholesale market in Southern Africa through four major divisions: Tiger Wheel & Tyre, Tyres & More, YSA and Treads Unlimited.
