RPM Automotive Group (ASX:RPM) has executed a binding agreement with ATF Automotive Group to acquire the latter as RPM seeks to expand its footprint in the 4WD accessories market, driven by ATF's Equipit Group.
Equipit is a leading wholesaler of 4WD and all terrain accessory design; RPM expects the acquisition to accelerate group revenue and earnings growth through geographic expansion and significant cross-selling opportunity.
The company notes Equipit's wholesale product range in afterpart accessories complements RPM's existing retail accessories business and allows RPM "greater control over the supply chain."
RPM is, in turn, to expand Equipit's wholesale operations from Queensland to a national footprint through RPM's existing infrastructure throughout Australia.
RPM Automotive Group was formed in the 1980s and owns five retail outlets; it also owns numerous brands including RPM Racewear, Carline, Genie, Air Anywhere, Formula Off-Road and RPM Autoparts.
Following the completion of acquisition, RPM Group will also own AFT's All Terrain Design, itself the owner of leading 4WD accessory brand MAX 4X4 Accessories.
Earlier this month, RPM completed its acquisition of Victoria Wide Tyre Service, the second tyre business acquisition it has executed this year. The company's quarterly results for March noted revenue growth across operations.
The total consideration for the acquisition of AFT Automotive is $2.4m, comprised of 50% cash and 50% RPM shares.
RPM Group expects completion of the acquisition by early July 2022.
Get the latest news and insights direct to your inbox