Graphite Capital to exit MTS

Graphite Capital has agreed to sell UK-based Micheldever Tyre Services, a distributor of car and motorcycle tires to Sumitomo Rubber Industries Ltd. The price of the sale is 215 million pounds.


Graphite Capital, a leading UK mid-market private equity specialist, has agreed to sell Micheldever Tyre Services (MTS), the UK’s second largest distributor of car, 4×4 and motorcycle tyres, to Sumitomo Rubber Industries Ltd (SRI). Listed on the Tokyo stock exchange, SRI is the sixth largest tyre manufacturer in the world. The transaction is subject to European Commission approval.

The sale price of £215 million represents a return of approximately 3.7 times Graphite’s investment in the company.
MTS is the UK’s second largest distributor of tyres to independent retailers and the third largest retailer of tyres, offering all major premium tyre brands and a number of exclusive mid-range and budget brands. It supplies around six million tyres each year to more than 6,000 retailers and direct to motorists through its Protyre retail chain.

Graphite originally backed the £85 million management buy-in/buy-out of MTS in 2006, with the objectives of driving consolidation of the highly fragmented tyre retail segment in the UK and supporting MTS’ organic growth strategy. Under Graphite’s ownership, MTS has made 36 bolt-on acquisitions, growing its Protyre retail chain from 16 to 99 outlets. It has developed successful divisions servicing vehicle dealerships and fleet operators, whilst also expanding its wholesale customer base by opening additional warehouses and further strengthening the product range.

As a result of the unrivalled depth of its product range and its strong focus on customer service since Graphite’s investment, the company has grown turnover from £150 million to over £320 million. During this period, its workforce has increased from approximately 500 to 1,600 employees.

Duncan Wilkes, MTS’ chief executive, commented: ‘Graphite has been a highly supportive owner of MTS and helped us drive the expansion of the business. SRI is fully committed to the UK market and to supporting our proven approach to growing the business. Today’s transaction ensures continuity of both management and of our successful multi-brand, multi-segment strategy. We look forward to working with SRI in the further development of the business.’

Graphite senior partner, Markus Golser, added: ‘MTS is a high-quality business run by an exceptional management team. Under our ownership, the company has consolidated its leading position in the UK and it remains extremely well placed to take advantage of the substantial growth opportunities in the tyre wholesale and retail markets.’

Partners Omar Kayat and Mudassir Khan worked with Markus Golser in managing the transaction for Graphite.

About Graphite Capital
Graphite is a specialist provider of private equity finance to mid-market companies in the UK. Graphite focuses on management buy-outs and also invests in replacement capital, expansion finance and turnaround opportunities. It backs companies with enterprise values of £25 million to £200 million.

In September 2013 Graphite raised £500 million for its eighth fund, Graphite Capital Partners VIII. The fund’s investments are: City & County Healthcare Group, the UK’s largest home care provider; nGAGE, a fast-growing recruitment business serving a range of niche areas within the public and private sectors; ICR, an energy industry repair and maintenance group; Trenchard Aviation, a civil aircraft maintenance business focusing on cabin services; New World Trading Company, an operator of pub restaurants; and Beck & Pollitzer, a market leader in industrial machinery installation and relocation.

Graphite’s previous fund invested in businesses in a variety of industry sectors including: Kurt Geiger, the luxury shoe retailer; Alexander Mann Solutions, the global market leader in recruitment process outsourcing; Education Personnel, the leading provider of supply teachers and teaching assistants to state schools in the UK; and London Square, a house-builder focused on prime sites with the M25.

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