Kwik-Fit, Europe’s largest fast fit chain, might return to the stock market later this year with a value of up to £750 million. CVC Capital Partners, the owner of the UK fast fit chain, is considering either a sale or to float Kwik-Fit on the stock market after it has paid back £100 million of debt used by CVC to fund the £350 million purchase.
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CVC, which is one of the UK’s leading private equity companies, bought Kwik-Fit Group from Ford in 2002. The deal represents a substantial loss for Ford, the US vehicle manufacturer bought the business from its founder Sir Tom Farmer two years earlier for £1 billion.
Tim Parker has turned the fast fit group around since becoming chief executive in August 2002. In the last few months the fast fit chain has become more price competitive and it has closed more than 200 outlets in the UK and sold a few centres in Spain, Belgium and Poland.
Nowadays, the UK fast fit group is soundly profitable and stable. New store formats, and new service offerings are strengthening the group’s prospects in several key areas in the car repair sector. In particular, MOTs, general car servicing and under-bonnet mechanical work will enable the company to strength its position in the aftermarket.
After bringing down prices by an average of 10%, the group is now on the way to reaching double digit increases in like for like sales and it will make around £60 million this year, compared with £25 million two years ago when it was bought by CVC Partners. A flotation would not only benefit CVC with a quick return on its original investment but also Ford as it retained a 19% stake in Kwik-Fit when it sold to the venture capital firm.
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By GlobalDataSOURCE: DATAMONITOR COMMENTWIRE (c) 2004 Datamonitor. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Datamonitor shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.
