Super Group, one of the leading transport logistics and mobility groups headquartered in South Africa, is pleased to announce that SG Fleet Group Limited (SG Fleet), a subsidiary of Super Group listed on the Australian Stock Exchange, has acquired the novated and vehicle procurement specialist NLC (Pty) Ltd (NLC). Peter Mountford, Chief Executive Officer of Super Group, commented: “This transaction will see SG Fleet significantly strengthen its position in the novated and private leasing markets.”
The acquisition price of $200 million includes $46 million of net cash on NLC’s balance sheet, equating to an enterprise value of $154 million. NLC Managing Director Matt Reinehr has opted to receive 9.1 million SG Fleet shares as part of the consideration. In addition to the scrip consideration, the acquisition is funded through an increase in debt ($110 million) and cash on hand.
NLC is headquartered in South Melbourne, with a national presence, and employs approximately 140 staff. The company has been at the forefront of novated product development and consumer vehicle finance since its establishment by Matt Reinehr in 1990. NLC derives revenue from a variety of sources related to its core novated offering, including insurance broking, and has continued to add new streams as it moves into adjacencies. In recent years, it has expanded into the provision of vehicle finance in the form of consumer loans, and further developed its vehicle sourcing services. The company writes mostly finance leases and funds via a principal and agency structure similar to that of SG Fleet.
“NLC is a strong business with diversified revenue streams, a quality, sticky customer book and a highly regarded management team. I am delighted that Matt and his team have decided to remain with the business. In the industry, NLC is recognised for its ability to win and retain customers and achieve strong margins and sustainable growth. Those qualities make this both a strategically attractive and a financially compelling deal,” SG Fleet’s Chief Executive Officer, Robbie Blau, noted.
SG Fleet anticipates cash EPS accretion in its first full year of ownership of over 25%, with further accretion to come in subsequent years. The 6.2-times FY15 EBITDA multiple does not include synergies, which are expected to be realised over the 2016 to 2018 financial year periods. “SG Fleet has always taken a very disciplined approach to inorganic growth, and I am very happy to say that the acquisition of NLC delivers on our objectives on a number of fronts,” Blau said.
Mr Blau further indicated that the two brands, NLC and SG Fleet, which will both be retained, bring to the table specific attributes in terms of products, expertise, sales approach, customer book, and scale. “Both companies have an established position in the market and distinct differentiators that can be leveraged across the combined business. Together, this makes for a very formidable blend of products and expertise, along with enhanced efficiency,” he said.
In addition to its core tool-of-trade and novated offering, SG Fleet currently provides a wide range of accessories and an extended warranty product, while NLC boasts additional expertise in consumer-style products and insurance. As it offers operating leases, SG Fleet also has extensive experience in the management of residual values and the vehicle disposal process. In turn, NLC contributes forward thinking and capabilities in terms of vehicle procurement in the consumer space. Additional benefits will be extracted from NLC’s novated customer base, namely an opportunity for SG Fleet’s tool-of-trade offering and increased sourcing and funding scale.
“The acquisition of NLC is consistent with our multiple pillar growth strategy and furthers a number of our objectives at the same time. Looking ahead, it allows us to gain market share by enhancing our offering and service, creates a wider range of products available to both sets of existing customers, and supports our diversification into adjacencies by gaining exposure to consumer-style solutions,” Mr Blau said.
“The acquisition further balances our business portfolio and firmly extends our leadership in the fleet management business to the novated segment,” Mr Blau concluded.
The acquisition is due to be completed before the end of the 2015 calendar year with the effective date being 30 November 2015.
|SG Fleet Acquisition of NLC – Investor Presentation||PDF (620 KB)|
|SG Fleet (SGF) ASX Announcement||PDF (250 KB)|