RPM Automotive Group expands into booming caravan and camper trailer sectors through acquisition – Proactive Investors Australia

RPM Automotive Group expands into booming caravan and camper trailer sectors through acquisition – Proactive Investors Australia

“The acquisition of Safety Dave is a key milestone for our business, supporting our vision of becoming a leader in the Australian automotive aftermarket,” says CEO.

RPM Automotive Group Ltd (ASX:RPM) has entered into a binding agreement to acquire safety products business, Safety Dave Pty Ltd, which will see the company expand into Australia’s growing caravan and camper trailer sectors.

Promisingly, the acquisition accelerates RPM’s growth strategy, underpinning more rapid growth in the Performance and Accessories division.

Both parties have agreed upon a total consideration for the acquisition at $9.5 million, which comprises 70% in cash and 30% in RPM shares.

Looking ahead, Safety Dave is expected to add annualised revenue of circa $10 million to the company coffers and is expected to be immediately value and earnings accretive.

“Key milestone”

Commenting on this strategic acquisition, RPM CEO Clive Finkelstein said: “The acquisition of Safety Dave is a key milestone for our business, supporting our vision of becoming a leader in the Australian automotive aftermarket.

“We look forward to welcoming the Safety Dave team into the RPM Group.

“The addition of this iconic Australian aftermarket brand will see RPM enter the fast-growing recreational vehicle market of caravans and camper trailers that has experienced strong growth of 26.7% over the last five years.

“Pleasingly, this addition allows us to serve more customers in more markets – expanding our recent acquisitions beyond wheels and tyres and into our performance and accessories division.”

Compelling strategic rationale

The synergies between the companies are two-fold with RPM benefitting from Safety Dave’s highly regarded reputation as it expands its operations into the caravan and campervan sector and Safety Dave.

Moving forward, RPM will provide Safety Dave with the infrastructure and logistics capability to better service the caravan, camper trailer and RV industry while also expanding its customer base to include both the Carline Automotive Group as well as Formula Offroad’s national distribution platform.

Notably, RPM’s Performance and Accessories Division is underpinned by attractive macro industry fundamentals with new recreational vehicle (RV) registrations in Australia up 4.2% in 2020, and the division returning EBIT greater than 20%.

This division has been identified as an opportunity to fast-track growth over the next 12 months with strong earnings achieved and projected over the next three to five years, attributed to significant increases in demand for automotive parts and accessories nationwide.

“Cross-pollination opportunities”

Finkelstein adds: “Safety Dave mirrors RPM’s other accessories businesses, with EBIT consistently in excess of 20%.

“The cross-pollination opportunities within our Performance and Accessories division for Safety Dave are very exciting, whilst the potential for RPM to increase its wholesale tyre customer-base to include the ever-growing caravan and camper trailer industry only highlights the obvious future synergies.”

About Safety Dave

Established in 2002, Safety Dave is a market leader in specialist safety products for caravans, and campervans with some of its products used in both the home and motor vehicles.

The business specialises in safety products such as rear vision systems, tyre pressure monitoring systems, defibrillators, first aid kits and fire safety products.

Finkelstein adds: “The acquisition of Safety Dave, funded from …….

Source: https://www.proactiveinvestors.com.au/companies/news/969673/rpm-automotive-group-expands-into-booming-caravan-and-camper-trailer-sectors-through-acquisition-969673.html

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