A.P. Eagers Limited has announced its selling Automotive Holdings Group Limited (AHG) Refrigerated Logistics division. The Sydney private equity firm, Anchorage Capital Partners, has bought the division for $100 million.
AP Eagers will receive cash proceeds of approximately $100 million, which will be utilised to repay all finance leases and hire purchase liabilities associated with Refrigerated Logistics, resulting in an expected reduction in net debt of approximately $95 million.
The company recognised a non cash impairment in relation to the AHG Refrigerated Logistics division on 31 December 2019 reflecting the value of the offer from Anchorage.
Refrigerated Logistics comprises all of the transport and warehousing operations, and associated employees, of Rand, Harris, Scott’s and JAT.
The sale achieves AP Eagers’ objective post the acquisition of AHG to divest the Refrigerated Logistics division as soon as commercially possible at a reasonable price.
Martin Ward, CEO and Managing Director of AP Eagers said the sale of AHG Refrigerated Logistics is consistent with its strategy to focus on our core automotive retailing business.
“The transaction follows an extensive sale process to find a buyer for the Refrigerated Logistics business on the optimal price and terms,” he said.
“Anchorage is the ideal owner for the Refrigerated Logistics business and has indicated a commitment to continue to invest and grow the business. We believe that the business will have a positive future under its new owners.”
AP Eagers may receive additional cash proceeds at the time of Anchorage’s exit from of its investment in Refrigerated Logistics depending on certain financial outcomes.
AP Eagers said in a statement that the disposal of the Refrigerated Logistics division will result in a reduction of AP Eagers’ existing contingent liabilities associated with that division, the quantum of which will depend upon the outcome of events prior to completion.
“As part of the Share Sale Agreement, AP Eagers has provided warranties and indemnities which are not unusual in the context of a transaction of this nature and has agreed not to own or operate a business in the refrigerated logistics sector for a period of 5 years,” AP Eagers stated.
Completion of the transaction is expected to occur in the first half of 2020.