The two largest industry consolidators have merged. AMA announced a binding agreement to acquire Gemini ARC on 14 September, giving the group a national footprint of 70 shops across NSW, Queensland, Victoria, ACT and WA.
“Gemini is an extremely well run business with very competent management and effective systems in place,” AMA’s Executive Chairman Ray Malone said.
“With Gemini and its management team joining the fold, AMA is by far and away the leading operator in Australia’s highly fragmented panel repair market and further strengthens our position to participate in the industry consolidation,” he said.
AMA will make an upfront cash payment of $27-28m ($35m less Gemini’s working capital) to be funded from AMA’s current cash resources with an additional $15 at the end of a three and a half year escrow period. Malone said the deal payment structure has been carefully designed to protect AMA’s balance sheet. He further stated that the company is in advanced discussions with a major Australian bank regarding and increased debt facility which, “together with the proceeds of the recent $45m capital raising and very strong operating cash flows, will position AMA well to continue to take advantage of attractive acquisition and growth opportunities across the group,” he said.
Gemini ARC has 40 shops including its latest acquisition in New Zealand and employs 750 staff. Group revenue for 2015 financial year was $150 according to the AMA overview.
Malone said that his team is confident of generating ‘meaningful synergies and cost savings from the integration of Gemini, with procurement being a key plank of those synergies’.
Gemini Announcement
"I am very pleased and excited to announce that today, Gemini Group has confirmed a merger with AMA. Gemini Group will be the largest shareholder in AMA," Andy Hopkins of Gemini said in his announcement statement to suppliers.
"This marks another major step forward in the growth of Gemini and a major leap forward for its business in Australia and New Zealand and further enhancing Gemini’s offering across the country. AMA is an ASX listed entity and is also a leader in our industry, offering clients a complete suite of services in the field of prestige repair and express repairs, as well as specialised automotive aftercare and accessories.
"Gemini and AMA combined will deliver the capabilities of a world-class company specialising in innovation and with the client experience of a smaller, more nimble, tenacious organisation.
"As we grow, we will continue to cultivate a culture that values extraordinary client care and exceptional service. We grow to get better, not just bigger. This means we will always convert our new capabilities into strategic advantages and successes for our clients.
"Our combined business offers our clients highly complementary and competitive services that together create a broader spectrum of mobility solutions in Australia and NZ.
"Gemini’s legacy of strong market leadership and innovation coupled with AMA’s access to large investment across Australia and New Zealand will immediately create new advantages for our insurer clients, including faster growth opportunities, consolidated savings, as well as expanded breadth of services and expertise.
I will remain Executive Chairman of the Gemini businesses and sit on the Board as a Director for the new AMA/Gemini Group. I will also head up the whole of the panel division as CEO and work closely with Ray Malone, in the OEM parts of the business.
"The combination of our two leading businesses has now enhanced our ability to meet our clients’ needs with speed, efficiency flexibility, and service qualities. You can still expect that everything we do from optimising service delivery to expanding capacity in strategic areas will remain exactly the same.
"In closing, I want to sincerely thank you again for your business and I look forward to leveraging our new scale and financial capabilities to enhance our mutual success."