Nationwide Autocentres
Nationwide Autocentres was formed to implement a “Buy & Build” strategy in the independent car servicing sector. The initial 41 centres (£10m sales) were grown by acquisition to 213 centres (£80m sales) at exit making Nationwide the UK’s leading chain of vehicle repair specialists. The investment yielded a 10.1x money multiple and an IRR of 72% p.a. over its 5 year life.
This was NBGI Private Equity’s first investment made in January 2001. The initial investment of £1.8m for a 51% control position was made within one month of becoming involved. Working closely with the management team, NBGI PE injected further funds to support the company’s Buy & Build programme, with a total investment of £2.6m. Nationwide was sold to Phoenix Equity Partners for £49m in February 2006, with NBGI PE holding a 45% stake (post ratchet).
The acquisitions made included the remaining 96 Lex Autocentre branches from RAC plc in April 2002, 54 Stop ’n Steer branches from Kwik-Fit in February 2003 and 50 AA Service Centres in November 2004. Further single site “in-fill” acquisitions were also made. A key feature of the strategy was the consolidation of a number of overlapping branches while retaining the customer base.
The need to provide vehicle servicing locally, coupled with the management team’s ability to centralize much of the overhead costs and processes, e.g. finance, marketing and regulatory requirements, and their ability to introduce national fleet sales to individual branches, made the sector ideal for a Buy & Build strategy.
