Deal: Sale of 75.1 per cent of Automotive Brands Group’s business to Metcash and Metcash’s $325 million institutional placement and $50 million share purchase plan

Area: M&A

Value: $53.8 million

Key players: The Freehills team was led by M&A partners Martin Shakinovsky, Andrew Rich and Adam Strauss and supported by senior associates Emma Rudd and Clayton James, as well as solicitors Li-Lian Yeo and Malika Chandrasegaran. The Freehills team worked closely with Metcash’s legal team consisting of Greg Watson (general counsel), Carole Chapman and Ruby Rozental. Freehills ECM partner Tim McEwen led on the institutional placement and share purchase plan, together with senior associate Jade Winterburn. Allens partner and co-head of the firm's private equity practice, Mark Malinas, led the Allens team on the matter, which included senior associate Jessica Choong and lawyers Philip Diack and Jarrod Woodward.

Deal significance: Under this transaction, Metcash is able to move to full ownership of ABG at various points over the next three to five years at an EBITDA multiple consistent with that paid for the initial 75.1 per cent stake.

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ABG is Australia’s largest privately-owned distributor and franchise operator in the automotive parts aftermarket sector, distributing product to a network of 241 stores. ABG owns and manages the Autobarn franchise (102 mainly retail stores), Autopro dealership groups (118 mainly trade-based stores) and its CarParts division services a further 21 independent operators. ABG is the third largest player in Australia servicing the automotive parts and after-market sector.

The proceeds of the institutional placement will be used to fund identified acquisitions, including the proposed acquisition of 75.1 per cent of ABG, the proposed move to 100 per cent ownership of Mitre 10, and growth opportunities, as well as providing financial flexibility to pursue additional future opportunities.