Bapcor Ltd (ASX: BAP) shares will be on watch this morning. This comes after the company announced its plans to expand in Asia through partly acquiring Tye Soon. At Friday’s market close, the Bapcor share price finished the week at $7.40.
Let’s take a look at what the auto parts retailer announced.
Details of the takeover
The Bapcor share price could be on the move today as investors weigh up the company’s latest update.
According to this morning’s release, Bapcor has executed an agreement for a 25% interest in Tye Soon.
Under the deal, Bapcor will acquire 25% of the issued equity in Tye Soon for an amount of SGD$12.5 million. This is expected to help drive Bapcor’s strategy in increasing its presence across Asia where it sees potential growth opportunities.
The completion of the agreement is scheduled to take place sometime next month. In addition, Bapcor will nominate several directors to join the Tye Soon board.
Bapcor’s managing director and CEO, Mr Darryl Abotomey, commented:
The complementary expertise of Tye Soon and Bapcor brings a range of opportunities for both businesses to collaborate and grow their markets. Tye Soon has particular strengths in genuine parts and aftermarket parts distribution as well as an excellent store network in fast growing South East and North East Asian countries. Bapcor will work with Tye Soon to maximise the opportunities to grow their businesses in Asia and Australasia.
What is Tye Soon?
Founded in 1993, Tye Soon is a leading automotive parts distributor that operates across Southeast and North Asia markets. The company imports and exports a wide range of genuine parts as well as aftermarket parts.
Headquartered in Singapore, the company has one of the largest portfolios of top-tier global brands for automotive parts. This includes Mercedes Benz, Bosch, Hengst, GMB, Nozumi, Champion and others.
The group’s annual revenue is around SGD$200 million across its international operations.
Bapcor share price snapshot
Over the past 12 months, the Bapcor share price has gained about 90%, but is down close to 5% year to date. The company’s shares reached a multi-year high of $8.53 during October last year.
Based on current valuation grounds, Bapcor commands a market capitalisation of roughly $2.5 billion, with 339.4 million shares outstanding.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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