AutoZone was formed in 1999 and acquired from Super Group by a consortium in 2010 for R435m. Picture: Supplied/MISA
Nicola Mawson
AutoZone, the beleaguered motor part retailer which went into business rescue in the middle of the year, has been bought out by Nikisize, an indirect subsidiary of automotive component and energy storage group Metair, with the deal being approved by the Competition Tribunal yesterday.
In a statement yesterday, the Tribunal said that the approval was subject to public interest and competition related conditions. The deal is worth some R290 million and would provide Metair with a distribution channel to grow its current automotive aftermarket businesses in South Africa.
Metair’s stock closed 2.8% higher to R11.10 per share thought it is down 32.5% over the course of the past year.
AutoZone submitted its business rescue plan in September, which proposed several structural changes, including closing nine branches that were deemed to be unprofitable, a move that was set to affect 46 employees.
The company, which claims to be South Africa’s biggest privately owned automotive parts retailer, had 214 wholly owned branches and 33 member-owned branches throughout Southern Africa including Botswana, Namibia and Swaziland.
Prior to business rescue, it had 1 400 employees.
AutoZone’s business rescue was precipitated by not being able to reach an agreement with Absa, its major creditor, to extend financing. Its fortunes were negatively affected by the lengthy COVID-19 lockdown.
Some R200m of the purchase price will be paid to Absa to settle the bank's secured claim, R15m to settle pre-commencement unsecured creditors and R75m to fund AutoZone’s working capital and provide it with the ability to trade as normal.
When the deal was first announced in October, the Motor Industry Staff Association (MISA) said it was grateful that the majority of its members’ jobs had been saved.
MISA’s CEO, Martlé Keyter, said they had managed to find alternative employment for five of the 11 members affected but six members would be retrenched.
“MISA is currently involved in restructuring and possible retrenchment consultations throughout the retail motor industry due to the ongoing dire economic situation. MISA wants to commend AutoZone for taking the initiative to enter into business rescue to sustain the business and to limit job losses,” she said.
Metair, which owns Nikisize via a 100% stake in Inalex, manages an international portfolio of companies that manufacture, distribute and retail products for energy storage and automotive components.
In the automotive sector, Metair’s products include ATE brakes, Supreme spring systems, Lumotech head and taillights, as well as Hesto Harnesses.
AutoZone’s range includes batteries, brake components, shocks, gaskets, gearboxes, engine parts, oil pumps and other heavy-duty parts catering for passenger and light commercial vehicles, among others.
In the six months to June, Metair reported that its operations “performed resiliently relative to their challenging operating and trading conditions and maintained a constant supply to customers”.
It said it was continuing to formulate a debt restructuring plan to address high debt levels, including Hesto’s obligations.
For the year to December 2023, it reported a revenue gain of 14% to R15.9 billion, while operating profit moved 7% higher to R487m.
AutoZone was formed in 1999 and acquired from Super Group by a consortium in 2010 for R435m. Private equity group Ethos Capital invested in the company in 2014, with the debt for the deal provided by Barclays Africa, which later reverted to Absa when Barclays sold down its stake and effectively exited the red bank.
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