Hella sells wholesale companies in Denmark and Poland

Automotive lighting and electronics supplier Hella GmbH & Co. KGaA is selling its Danish and Polish wholesale companies to the Swedish wholesaler and car service retail chain operator, Mekonomen AB. A corresponding agreement for the sale of FTZ Autodele & Verktoj A/S (FTZ) and Inter-Team sp. z o.o. (Inter-Team) has been signed by both companies.

The purchase price amounts to 395 million euros on a cash- and debt-free basis. In addition, a consideration equivalent to profits generated from 30 November 2017 to completion of the transaction will be paid to Hella. The sale is subject to approval by the relevant antitrust authorities and is expected to close in the third quarter of this year.

“With Mekonomen, a renowned wholesaler will take over our activities in Denmark and Poland, which will strategically develop the business,” explains Dr Werner Benade, managing director at Hella responsible for the company’s Aftermarket and Special Applications segment. “We will systematically focus the Aftermarket segment on the independent spare parts business and innovative workshop equipment. As part of this, we are accelerating the interaction between the divisions and opening up digital business models.”

Pehr Oscarson, president and chief executive officer of Mekonomen, adds: “Through the acquisition of FTZ and Inter-Team, we strengthen our position as a leading automotive spare parts distributor in the Nordic region and take the step into Europe. The acquisition is in line with our strategy of playing a central role in the ongoing consolidation in Europe. These are two well-run companies that will continue to develop within the framework of existing corporate structures and brands as standalone companies in the group.”

FTZ and Inter-Team employ a total of around 2,500 people. The two wholesalers achieved total sales of around 480 million euros in the 2016/2017 financial year. This corresponds to about seven per cent of Hella’s group consolidated sales.

The transaction is conducted with the assistance of Jefferies Financial Group (exclusive financial advisor to Hella), Freshfields Bruckhaus Deringer (legal advisor), Ebner Stolz (financial and tax due diligence) and Roland Berger (commercial due diligence).

“The pan-European consolidation of the auto parts distribution industry continues at a truly remarkable pace,” commented Rex Green, global co-head of Automotive Aftermarket Investment Banking at Jefferies. “Consolidation surely reflects many factors, but perhaps the most important of which is the current technological transformation of the automotive industry itself and the need for all aftermarket participants to obtain the scale necessary to invest in the attendant transformation of the automotive repair and service sector.”