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 │ APRIL 2015
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TRANSPORTATION & LOGISTICS · Group. Through its two iconic brands, Maaco and Meineke, Driven Brands is one of the largest franchise platforms in the automotive aftermarket services
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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.
Jeffery PerkinsManaging Director [email protected]+49 (0) 69 3650638 00
TRANSPORTATION & LOGISTICS
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ APRIL 2015
MICHELIN ACQUIRES STAKE IN ONLINE TIRE RETAILER
Groupe Michelin is acquiring a 40 percent stake in France’s leading online tireretailer Allopneus. The tiremaker is investing roughly €60 million for its minority sharein the Internet company. Working with Allopneus, Michelin will expand its onlinerange and extend its commercial presence, the tiremaker said. Allopneus currentlyholds 7 percent of the French tire market share and sold roughly 3 million tires in2014. The company was established in 2004, and employs roughly 200 people.Michelin’s acquisition of shares in Allopneus SAS is subject to validation from theFrench Competition Authority.
AftermarketNews
AAA RELEASES AMERICAN DRIVING SURVEY
The first year data show that all drivers 16 and older drive, on average, 29.2 milesper day or 10,658 miles a year. Men reported driving more miles than women;Caucasians reported driving more miles than respondents of other races; Hispanicrespondents reported driving the least. Teenagers and drivers ages 75+ also drivesignificantly fewer miles on average. About 50% of all miles driven are in a car, andanother 40% in an SUV or pickup truck.
AAA
WARREN BUFFETT ADDS TO AUTOMOTIVE BETS WITH AXALTA INVESTMENT
Berkshire Hathaway's Warren Buffett is increasing his investment in the recoveringU.S. automotive sector, this time by taking a $560 million stake in Axalta CoatingSystems , a 145-year old seller of coatings for cars, SUV’s and commercial vehicles.The investment comes as Axalta’s private equity owner The Carlyle Group beginsexiting an extremely successful buyout investment. Carlyle bought Axalta fromDuPont for $4.9 billion in 2013 as the chemical and agriculture giant’s CEO EllenKullman sought to pare down its operations and focus on high margin businesses.
Forbes
HARRIS WILLIAMS & CO. DEAL SPOTLIGHT
Harris Williams & Co. advised Driven Brands, a portfoliocompany of Harvest Partners, on its sale to Roark CapitalGroup. Through its two iconic brands, Maaco and Meineke,Driven Brands is one of the largest franchise platforms in theautomotive aftermarket services sector.
Press Release
Driven Brands
Harris Williams & Co. advised Dent Wizard, a portfoliocompany of H.IG. Capital, on its sale to Gridiron Capital.Dent Wizard is the leading provider of cosmetic automotivereconditioning services in North America.
National prov ider of automotive reconditioning serv ices in
North America.
Gridiron Capital, LLC
4/10/2015 Armstrong Tyres Pty Ltd. Manufacturer of tires and wheels. Trelleborg Wheel Systems
Australia Pty Ltd
3/31/2015 Tribar Manufacturing LLC Developer, manufacturer, and supplier of injection molded parts for the
industrial and automotive industries.
HCI Equity Partners
3/31/2015 Revocoat SAS Developer, manufacturer, and supplier of sealants, dampers, and
anticorrosion products for the automotive industry.
PPG Industries Inc.
3/25/2015 Superwinch, LLC Designer and producer of winches. Kinderhook Industries;
Kinderhook Capital Fund IV
3/24/2015 American Tire Distributors
Holdings, Inc.
Independent supplier of tires to the North American replacement tire
market.
Ares Management, L.P.
3/16/2015 Visteon Corp., Global Interiors
Business
Manufacturer of interior products such as instrument panels, door
panels, consoles, and pillars for vehicle manufacturers.
Reydel Automotive Minority
Holdings B.V.
3/16/2015 Phillips & Temro Industries, Inc. Designer and manufacturer of automotive heating products, systems,
and controls as well as cooling and silencing products.
Harbour Group
3/10/2015 Van Tuyl Group Operator of automotive dealerships and franchises throughout the
Southeast and Midwest.
Berkshire Hathaway Inc.
3/2/2015 Maval Manufacturing Inc. Manufacturer of power steering pumps, power steering gear boxes,
and electric steering columns and gears.
Remy International, Inc.
2/12/2015 ATDynamics, Inc. Designer, manufacturer, and supplier of clean technology products
engineered to reduce fuel consumption and carbon emissions in the
transportation industry.
Stemco LP
1/30/2015 ZF Lenksysteme GmbH
(nka:Robert Bosch Automotive
Steering GmbH)
Developer, producer, and seller of steering systems for passenger cars
and commercial vehicles worldwide.
Robert Bosch GmbH
M&A TRANSACTIONS
2
RECENT M&A TRANSACTIONS1,2
TRANSPORTATION & LOGISTICS
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ APRIL 2015
PAGE |
PUBLIC MARKETS OVERVIEW
3
TRANSPORTATION & LOGISTICS
TEV / LTM EBITDA TEV / 2015E EBITDA
AVERAGE REVENUE GROWTH (2011 – 2014) AVERAGE REVENUE GROWTH (2014 – 2016P)
AVERAGE EBITDA GROWTH (2011 – 2014) AVERAGE EBITDA GROWTH (2014 – 2016P)
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ APRIL 2015
7.7x
10.2x
12.0x
13.5x
Suppliers
Vehicle Manufacturers
Distributors and Retailers
Dealerships and Services
Providers
7.1x
10.2x
11.2x
12.3x
Suppliers
Vehicle Manufacturers
Distributors and Retailers
Dealerships and Services
Providers
2.8%
3.3%
7.6%
14.2%
Vehicle Manufacturers
Suppliers
Distributors and Retailers
Dealerships and Services
Providers
2.2%
2.2%
3.4%
10.6%
Distributors and Retailers
Vehicle Manufacturers
Suppliers
Dealerships and Services
Providers
4.6%
7.3%
7.5%
13.5%
Distributors and Retailers
Vehicle Manufacturers
Suppliers
Dealerships and Services
Providers
3.6%
5.6%
7.9%
9.8%
Vehicle Manufacturers
Distributors and Retailers
Suppliers
Dealerships and Services
Providers
PAGE |
(30%)
(20%)
(10%)
0%
10%
20%
30%
40%
4/20/14 7/20/14 10/20/14 1/20/15 4/20/15
Suppliers Distributors and Retailers
Dealerships and Service Providers Vehicle Manufacturers
S&P 500 Index
STOCK PRICE PERFORMANCE
4
TRANSPORTATION & LOGISTICS
(Indexed to April 20, 2014)
TRAILING TWELVE MONTHS
MEDIAN % CHANGE (1 MONTH) MEDIAN % CHANGE (12 MONTH)
AUTOMOTIVE AFTERMARKET SECTOR UPDATE │ APRIL 2015
(2.2%)
(0.0%)
1.3%
2.1%
Vehicle
Manufacturers
Distributors and
Retailers
Dealerships and
Service Providers
Suppliers
(5.2%)
(3.0%)
14.5%
23.2%
Vehicle
Manufacturers
Suppliers
Distributors and
Retailers
Dealerships and
Service Providers
PAGE |
OUR GROUP
Harris Williams & Co. is a leading advisor to the transportation and logistics M&A market. Our Transportation & LogisticsGroup has experience across a broad range of sectors, including third-party logistics, rail and rail services, marinetransportation, transportation equipment, niche transportation, automotive and heavy duty vehicle, and airport andaviation services.
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.
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.