RPM Automotive Group Ltd (ASX:RPM) has completed its acquisition of AFT Automotive Group in a move that will increase annual revenue run rate (ARR) to more than $120 million and deliver economies of scale through an expanded operational footprint and vertically integrated offering, that provides cross-sell opportunities between the divisions and a focus on exceptional customer service.
The acquisition strengthens RPM’s position in the fast-growing 4WD accessories market.
AFT Automotive Group is comprised of Equipit Group - a leading wholesaler of premium 4x4 Accessories and All Terrain Design - a leading designer of 4WD motor vehicle accessories. The Equipit and the MAX 4x4 Accessories Range has developed a strong reputation for quality accessories that are great value and easy to fit.
Building diverse revenue streams
Given AFT’s position in the market this is a highly strategic acquisition for RPM, which has built a national footprint of businesses involved in all facets of the large and ever-growing Australian Automotive Industry.
The company has focused its growth strategy on the tyre industry and in turn built a strong distribution platform, well-supported by an extensive retail distribution network concentrating on emergency roadside assistance for the expanding transport industry.
The company now boasts a vertically integrated, national network, of retail stores specialising in mechanical repairs and motor vehicle accessories which complements its market-leading motorsport apparel and safety equipment retail chain.
The acquisition of AFT further strengthens RPM’s niche manufacturing and design and supports its strong position in the high-growth 4x4, caravan and camper trailer sectors.
RPM has now built diverse revenue streams across market sectors, distribution channels, as well as products and services.
Wholesale distribution development
The AFT acquisition gives RPM a new wholesale product range in 4WD accessories. This complements the company’s existing retail accessories business through the supply of existing retail customers with more products and greater control over the supply chain.
RPM will now expand AFT’s existing wholesale operations from Queensland to a national footprint by leveraging existing infrastructure throughout Australia. The addition of All Terrain Design’s business will enable RPM to utilise the design software to produce custom design work for RPM’s internal divisions as well as for external customers.
Commenting on the completion of the acquisition, RPM CEO Clive Finkelstein said: “Over the past year, we have successfully executed on our strategic plan, exceeding our expectations through the delivery of strong organic revenue growth and continued margin expansion.
"We are building a vertically integrated business across wholesale and retail, with enhanced capabilities in design and manufacture.
"With our proven experience in the 4WD space, and with our national infrastructure, we have significant plans for developing Equipit Group and Max 4x4 Accessories into a major national 4x4 accessories player.”