Boyd Group Income Fund has entered into an agreement to acquire Ellis Hopkins Inc., Timron Holdings Inc. and S&L Autoglass Inc., which together own and operate 14 collision repair centers and a glass repair and replacement business in northern Florida under the trade names Autocrafters Collision Repair, Walker Collision Repair and S&L Auto Glass (collectively "Autocrafters").
Like this article? Sign up to receive our weekly news blasts here.Autocrafters is the leading provider of automotive collision repair services in the Jacksonville area of north Florida, with extended operations in Tallahassee and Gainesville, Fla. Autocrafters generated sales of approximately US$32.6 million for the year ended December 31, 2011 and Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") of approximately US$4.0 million.
Boyd Group is not acquiring the land and buildings and instead will pay an estimated US$0.6 million per year in rent. The acquisition is expected to be completed on November 30, 2012.
"We are very pleased to announce another multi- location collision repair operator acquisition," said Brock Bulbuck, president and chief executive officer of the Boyd Group. "This will be our fourth multi- location acquisition this year, and the third in Florida. At the end of last year, we had no presence in Florida. Upon completion of the Autocrafters acquisition, we will have a total of 37 locations in the state, including the recently completed acquisition of The Recovery Room. These acquisitions build a strong presence in Florida, a market we consider attractive, and provides us with additional growth opportunities. Autocrafters has a similar customer base and business model to Boyd's, which should facilitate integration. This transaction demonstrates our commitment to our stated growth strategy and to solidifying our industry-leading position while continuing to look for attractive growth opportunities."
The total consideration of approximately US$19.5 million, subject to working capital adjustments, will be funded through a combination of cash, bank debt, convertible debt, and third-party financing.
In conjunction with the acquisition, Boyd entered into an agreement in which a group of lenders and underwriters will finance $30 million principally used to replenish the cash balances of the fund following its acquisition of Autocrafters and The Recovery Room as well as to fund ongoing growth for 2013, with the remainder being used for general working capital purposes.
Bulbuck and Tim O'Day, president and chief operating officer of the Boyd Group's U.S. operations, have confirmed their intention to sell up to 191,900 units held by them. Approximately 63% of these units will be sold in "off market" transactions to existing Boyd trustees and senior managers at a price equal to a 5% discount to the 10 day volume weighted average price of the units ending November 28, 2012 so as to broaden and deepen management and insider ownership in the Fund.
The balance of the units are being sold through the Toronto Stock Exchange at market prices to third parties. In total, Bulbuck intends to sell 91,900 units and O'Day intends to sell 100,000 units, representing 14.2% and 17.5% respectively of each of their total investment in Boyd, including options.
In relation to the purchase of units by the Boyd senior managers, The Boyd Group Inc. will provide loan support of approximately $1,000,000 for up to 75% of each senior manager's purchase, which loan shall be secured by the purchased units.. Bulbuck and O'Day have agreed to coordinate all such sales exclusively through National Bank Financial Inc. . The acquisition is expected to be completed on Nov. 30, 2012.
