Japanese trading house Itochu Corp. has agreed to buy tire retailer Kwik-Fit from private equity firm PAI Partners in a deal valued at 637 million pounds ($1.04 billion), Reuters reported. The acquisition, which follows Itochu’s focus to expand its businesses that are more directly linked to consumers, Reuters said.
(Reuters) – Japanese trading house Itochu Corp said on Thursday it has reached a basic agreement to buy Britain’s top tyre seller Kwik Fit from European fund PAI partners for 637 million pounds ($1.04 billion).
The deal underscores a push by Itochu to focus on businesses that are more directly linked to consumers as a means to hedge against volatility in resource markets, its traditional stronghold.
Itochu acquired Britain’s Stapleton’s Tyre Services Ltd in 1994. The Kwik Fit acquisition would give it an additional 1,218 automotive service shops in Europe.
Kwik Fit’s sales rose 6.2 percent to 485.5 million pounds and earnings before interest, tax, depreciation and amortisation (EBITDA) rose 9.4 percent to 51.3 million pounds in the first half of last year.
Itochu’s shares closed the morning session up 1 percent to 848 yen, outperforming the benchmark Nikkei 225 .N225 which advanced 0.5 percent. (Reporting by Mariko Katsumura and Isabel Reynolds; Editing by Edwina Gibbs)