PAI Partners looking to exit Kwit Fit

Kwik Fit, the European car parts retailer, is being put up for sale by its private equity owner PAI Partners for about $1 billion dollars, according to reports. PAI has already appointed Credit Suisse and Morgan Stanley to handle the deal. PAI bought Kwit Fit from buyout firm CVC in 2005 for 800 million pounds ($1.3 billion).

(Reuters) – French private equity firm PAI Partners is mulling the sale of Kwik Fit, the European car parts retailer, in a deal that could be worth about $1 billion, a source familiar with situation said.

PAI has appointed Credit Suisse and Morgan Stanley to consider options for the business, the source said, confirming earlier reports by Sky News and the Financial Times.

PAI and Credit Suisse declined to comment. Morgan Stanley had no immediate comment.

No binding decision has been taken on a sale of a business that PAI bought from rival buyout firm CVC in 2005 for 800 million pounds ($1.3 billion), the source said.

Two possible buyers are tyremakers Bridgestone and Michelin, which owns rival tyre fitter ATS Euromaster, the media reports said.

Having struggled in the face of the tough economic environment and high commodity prices pushing up tyre costs, Kwik Fit reported an improving performance in the six months to end-June.

Sales rose 6.2 percent to 485.5 million pounds and earnings before interest, tax, depreciation and amortisation (EBITDA) increased 9.4 percent to 51.3 million pounds in the first half, it said in a statement.

Kwik Fit reset covenants on its debt in May and completed the sale of its insurance business for 215 million pounds in August, proceeds of which it used to reduce debt.

Factoring in the sale, net debt at end-June was 447.2 million pounds, equating to about six times full-year earnings.
(Reporting by Karolina Tagaris, Simon Meads and Quentin Webb; Editing by Douwe Miedema and David Holmes)