This morning, Bapcor (BAP), Australia’s largest vehicle parts, accessories, and equipment provider, reported to the market that on Friday, they received a non-binding proposal from Bain Capital. The HNW Equity Portfolio has a 2% weight to BAP.
Key Points:
- Bain Capital is looking to acquire 100% of Bapcor for $1.83 billion, which translates to $5.40 cash per share
- Currently, the Bapcor board is assessing and reviewing the proposal’s conditions and deciding whether this is the best option for the business and its shareholders.
- Over the past year, many private equity groups have been speculated about a potential takeover of Bapcor, meaning this could be the first of many offers.
Portfolio Strategy: Bapcor provides the Portfolio exposure to automotive parts aftermarkets across Australia and New Zealand through motor vehicles (Burson), Trucks (Truckline), Agriculture (Bearing Wholesalers) and servicing (Midas). Bapcor benefits from the constantly aging car fleets of Australia and New Zealand that require more frequent servicing, with the average vehicle age increasing from 9.5 years before the pandemic to over 11 years now. Over the medium term, Bapcor will benefit from the transition to EVs, with many components of EVs needing more regular servicing.
This is unlikely to be the final offer and is very opportunistic, so we will sit tight and see how this unfolds.
Bapcor finished up 14% to $4.97
