Automotive retail Group, AP Eagers, is selling Automotive Holding Group Refrigerated Logistics (AHG RL) for $100 million.
The sale includes the Rand, Harris, Scott's and JAT businesses.
AP Eagers has entered into a binding agreement to sell AHG RL to Anchorage Capital Partners – an Australian-based private equity firm with a track record of acquiring and growing a wide variety of companies across the Asia-Pacific region.
"For a number of years now, AHG RL has continued to build and confirm themselves as a leading provider of refrigerated transport and logistics in Australia, covering almost every corner of the country," AHG said in a statement. "Anchorage represents an ideal owner, indicating its commitment to growing and continuing to invest in the refrigerated logistics business so we can continue to serve our customers."
AP Eagers said in an ASX announcement that the sale achieves its objective post the acquisition of AHG to divest the Refrigerated Logistics division as soon as commercially possible at a reasonable price.
"The sale of AHG Refrigerated Logistics is consistent with our strategy to focus on our core automotive retailing business," said AP Eagers CEO and Managing Director, Martin Ward.
"The transaction follows an extensive sales process to find a buyer for the Refrigerated Logistics business on the optimal price and terms.
"Anchorage is the ideal owner for the Refrigerated Logistics business and has indicated a commitment to continue to invest and grow the business," he said. "We believe that the business will have a positive future under its new owners."
Completion of the transaction is expected to occur in the first half of 2020 and is subject to conditions.
On completion, AP Eagers will reportedly receive cash proceeds of approximately $100 million, which will be used to repay all finance leases and hire purchase liabilities associated with Refrigerated Logistics, resulting in an expected reduction in net debt of approximately $95 million.
AP Eagers recognised a non cash impairment in relation to AHG RL on 31 December 2019 reflecting the value of the offer from Anchorage.
In other news, AHG RL commits to apprenticeship program.
