Kwik-Fit ‘Worth Up to £1 Billion’
Kwik-Fit could be worth up to £1 billion if it were auctioned in the coming months, according to media reports. CVC Capital, which acquired the business from Ford in 2002, is thought to be ready to appoint financial advisers. The Financial Times reports that Citigroup, Deutsche Bank, Goldman Sachs, Merrill Lynch and Morgan Stanley are all vying for the mandate.
The news follows mounting press speculation that CVC is looking for an “exit strategy” and that the advisers would help the company assess its options. According to the Financial Times, a floatation will probably be considered, although a source told the business newspaper that a sale before the end of the summer was more likely. The report said that buy-out groups were likely to be interested in the company’s strong cash flow while trade interest may come from manufacturers, including Bridgestone and Michelin. Another option could be a refinancing, where CVC loads the business with debt and pays itself a dividend while retaining a majority shareholding, a Scotsman article suggested.
Edinburgh-based Kwik-Fit was established in 1971 and was sold to Ford in 1999 before CVC Capital Partners took it over for £330 million in 2002. Since the takeover by CVC, Kwik-Fit has closed a number of sites in order to boost profitability and embarked on its first TV advertising campaign for more than five years. It is said to have generated turnover of £750 million and profits of £60 million in its last financial year.