CVC Capital Partners, the parent company of Kwik-Fit, has announced that it has abandoned plans for an initial public offering and is instead looking to sell the company. As a leading player in one of the growth segments of the aftermarket, there should be no shortage of interested parties.

CVC Capital Partners is looking to profit from its investment in leading European fast fit player Kwik-Fit, having acquired control of the company from Ford Motor Company in 2002. After restructuring the business over the past couple of years, it is now a more attractive proposition and is likely to attract much interest.

Kwik-Fit has undergone quite a radical overhaul in private equity ownership. It has exited small operations in Belgium and Spain, sold its UK garage servicing business Stop'n'Steer, and closed both its Silver Shield windscreen replacement business and Hometune mobile servicing operation.

The group has also consolidated its core Kwik-Fit branch network in the UK while working to expand in its other core markets. In late 2004, Kwik-Fit acquired smaller competitor Axto in France to add to its Speedy chain there, while organic expansion of the German chain Pit-Stop is increasing its presence in that market. In France and Germany there are significant opportunities to increase sales of tires, while in the UK and the Netherlands, Kwik-Fit can expand into more mechanical, service and MOT work.

A further attraction of Kwik-Fit for potential suitors is its positioning in the fast fit and autocenter market, which is the growth sector of the European aftermarket. Although the wider aftermarket is expected to show a modest decline in value, 1%, through to 2008, the fast fit, autocenter and tire specialist sectors are expected to see an increase in market value. Over E1.5 billion is expected to be added to revenues in these areas during the 2003-08 period, with consumers perceiving them to be a cost competitive and low hassle way to maintain a car.

After much consolidation in recent years a number of major international competitors have emerged in this sector, including Norauto, ATU and Michelin's Euromaster network. For any company wishing to take a share of this market, Kwik-Fit is a strong player with much potential and would certainly make an attractive acquisition target.


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