www.harriswilliams.com Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorised and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business. TRANSPORTATION & LOGISTICS AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ NOVEMBER 2015
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www.harriswilliams.com
Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorised andregulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.
TRANSPORTATION & LOGISTICS
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AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ NOVEMBER 2015
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www.harriswilliams.com
TRANSPORTATION & LOGISTICS
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ NOVEMBER 2015
TOYOTA PLANS $1 BILLION OUTLAY TO ADVANCE ARTIFICIAL INTELLIGENCE
Toyota Motor Corp. will invest $1 billion to form a U.S.-based research anddevelopment company to develop artificial intelligence as an underpinningtechnology for future vehicles and manufacturing. The company, called ToyotaResearch Institute Inc., will be located in Silicon Valley near Stanford University inPalo Alto, California, Toyota said. Operations at the company will begin inJanuary.
Automotive News
SHIFTMOBILITY WANTS TO BRING PARTS NETWORK INTO THE MODERN AGE
Cars may be getting smarter, but the supplier network that connects partsmanufacturers, distributors, and repair shops is still operating under an archaic,inefficient, and painfully slow system. It was that inefficiency—witnessed firsthandwhile their car was being serviced—that captured the imagination of Pavana Jain,a longtime Oracle executive, and Arvind Jain, who has two decades of productdevelopment experience. They spent three years developing their answer: a fullyintegrated mobile platform that connects all three verticals on the service side ofthe automotive business. The three distinct interfaces—ShopLite for repair shops,SupplierPro for distributors, and VroomBox for manufacturers—all share a commonsoftware platform, the startup ShiftMobility.
Fortune
WHAT WE’RE READING
RECORD AUTOMOTIVE AFTERMARKET INDUSTRY WEEK
This month in Las Vegas, Automotive Aftermarket Industry Week (AAIW) becamethe largest automotive gathering on the planet thanks in part to the AftermarketAuto Parts Alliance. The Alliance became what is believed to be the first programgroup to ever the hold its convention in conjunction with the AAPEX and SEMAshows that make up AAIW. Dubbed the Aftermarket Jackpot, the Alliance’striennial event drew more than 3,800 people from Auto Value/Bumper to Bumperstores and shops.
Aftermarket News
IHS PREDICTION: A LOOK AT CARS ON ROAD IN 2020
In the last seven years, the average age of vehicles on the road in the U.S.increased by 15% to 11.5 years. How will that rate change in the next five years?According to Mark Seng, the global aftermarket practice leader for IHSAutomotive, the company’s prediction is an increase in overall average age ofabout 3% by 2020. While that may not sound like a lot, where dealers can makestrategic moves to position themselves for maximum potential profit is to look atwhich segments will see the biggest growth.
Jeffery PerkinsManaging Director [email protected]+49 (0) 69 3650638 00
UPS E-commerce continues to accelerate in the automotive aftermarket industry.New research shows that 56% of online automotive parts and accessoriesshoppers are making their purchases online – an 8% increase over the previousyear. The study also indicates that consumers are combining online and in-storechannels for an omnichannel shopping experience. Omnichannel is whenshoppers seamlessly shift between mobile, online and in-store resources toresearch, purchase, pick up and return their items.
Aftermarket News
ONLINE AUTO PARTS SALES ACCELERATE; SHOPPERS SHIFT BEHAVIORS
Dealerships and Service Providers Vehicle Manufacturers
S&P 500 Index
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OUR GROUP
Harris Williams & Co. is a leading advisor to the transportation and logistics M&A market. Our Transportation & LogisticsGroup serves companies in a broad range of attractive niches, including third-party logistics (3PL), truck, rail, marineand air transportation, transportation equipment, and the automotive and heavy duty vehicle market.
TRANSPORTATION & LOGISTICS
RECENTLY CLOSED T&L TRANSACTIONS
DEEP EXPERIENCE ACROSS T&L SECTORS
MARINE TRANSPORTATION
NICHE TRANSPORTATION
TRANSPORTATION EQUIPMENT
RAIL & RAIL SERVICES
AUTOMOTIVE & HEAVY DUTY
VEHICLE
THIRD-PARTY LOGISTICS
AIR TRANSPORTATION
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AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ NOVEMBER 2015
Harris Williams & Co. has a broad range of industry expertise, which creates powerful opportunities.Our clients benefit from our deep-sector experience, integrated industry intelligence andcollaboration across the firm, and our commitment to learning what makes them unique. For moreinformation, visit our website at www.harriswilliams.com/industries.
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OUR FIRM
TRANSPORTATION & LOGISTICS
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ NOVEMBER 2015
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PUBLIC COMPARABLES
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TRANSPORTATION & LOGISTICS
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ NOVEMBER 2015
Stock Performance
Stock Price Change from 52-Week TEV / EBITDA EBITDA
($ in millions except per share data) TEV Current Prior Month Prior Year High % of High Nov-14 May-15 Current 2015E 2016P
Harris Williams & Co. (www.harriswilliams.com) is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services.
Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorised and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.
THIS REPORT MAY CONTAIN REFERENCES TO REGISTERED TRADEMARKS, SERVICE MARKS AND COPYRIGHTS OWNED BY THIRD-PARTY INFORMATION PROVIDERS. NONE OF THE THIRD-PARTY INFORMATION PROVIDERS IS ENDORSING THE OFFERING OF, AND SHALL NOT IN ANY WAY BE DEEMED AN ISSUER OR UNDERWRITER OF, THE SECURITIES, FINANCIAL INSTRUMENTS OR OTHER INVESTMENTS DISCUSSED IN THIS REPORT, AND SHALL NOT HAVE ANY LIABILITY OR RESPONSIBILITY FOR ANY STATEMENTS MADE IN THE REPORT OR FOR ANY FINANCIAL STATEMENTS, FINANCIAL PROJECTIONS OR OTHER FINANCIAL INFORMATION CONTAINED OR ATTACHED AS AN EXHIBIT TO THE REPORT. FOR MORE INFORMATION ABOUT THE MATERIALS PROVIDED BY SUCH THIRD PARTIES, PLEASE CONTACT US AT THE ABOVE ADDRESSES OR NUMBERS.
The information and views contained in this report were prepared by Harris Williams & Co. (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable, but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The financial instruments discussed in this report may not be suitable for all investors, and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent.