Motus acquires UK-based FAI Automotive for R550m
The deal is expected to deepen the automotive company’s footprint in the aftermarket business
SA’s biggest automotive company, Motus, has acquired UK-based FAI Automotive for R550m in a deal that aims to deepen its footprint in the aftermarket business that sells car parts to vehicles that fall outside the warranty.
Motus said in a statement on Friday that the deal, which will be funded through available cash resources, will enable it to procure car parts and related products at competitive prices from the Far East, including China and Taiwan, through combined buying power and will use and share the existing distribution in the region.
Motus CEO Osman Arbee has previously said that the company is looking for opportunities in selected international markets.
The family-owned FAI has 40,000 product offerings covering all major vehicle manufacturers. It is also one of the leading independent distributors of replacement automotive parts globally, including in the UK and Europe.
Motus said FAI’s product range was similar and complementary to its aftermarket parts business in terms of components such as engine, suspension, steering and braking parts.
FAI generated £32m (R640m) in the year to end-June 2021, with more than 50% of the turnover generated outside the UK. The operating margin was more than 10%.
The SA company already has a presence in the UK, where it owns 86 commercial and 33 passenger dealerships.
Arbee has previously said that out of 12-million cars that are available in SA, only 25% are under warranty, meaning the 75% did not have warranty, opening an opportunity for company the company.
Motus, which in SA competes with established players such as Combined Motor Holdings and Bidvest, sold nearly 170,000 cars in SA in the year to end-June, equally split between new and pre-owed cars. In 2019, before the pandemic, it sold more than R500,000 vehicles.
It also has a car rental business, which has felt the pinch of declining tourist numbers due to lockdown restrictions. However, with Covid-19 gradually coming under control as countries roll out vaccination programmes, business and leisure travel is expected to gradually pick up.
Motus shares were modestly lower (0.45%) at R101 in early trade on the JSE on Friday morning, but up 80% year to date, making it one of the best-performing stocks on the JSE.
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