AAC in 3.4x auto repair exit

Graphite Capital has agreed to buy AAC's stake in the automotive repair company U-POL for £130m, after selling the company to AAC for £75 million in 2006.

Graphite Capital just can't get enough.
The firm is buying back automotive repair company U-POL for £130 million ($199 million; €157 million) from AAC Capital Partners, which will generate a 3.4x return for AAC.
Graphite sold U-POL, a manufacturer of refinishing products for damaged cars, to AAC for £75 million in 2006. The firm used KPMG to sell the business in an auction.

“When we bought [U-POL], it was making about 8.1 EBITDA,” AAC partner Paul Southwell told PEO. “That has grown to 14 EBITDA at the current profitability level.”

U-POL’s profitability in America has doubled while under AAC’s ownership. The company was purchased from Graphite when AAC was still the private equity arm of Dutch banking group ABN AMRO Capital, which was renamed AAC Capital partners in September of 2007.

“We were impressed by U-POL’s strong trading performance since we sold the business in 2006 to AAC,” said partner at Graphite John O’Neill in a statement. “We know the business well and see excellent opportunities to work with the new chief executive, Phil May, and the management team to accelerate profit growth.”

U-POL supplies vehicle body shops in over 100 countries with automotive refinishing materials such as bodyfillers, coatings, aerosols and polishing compounds.

AAC is currently investing from its €950 million fund, financed by Goldman Sachs and a consortium of investors including AlpInvest and the Canada Pension Plan in November of 2008. Southwell stated that AAC is currently about 50 percent invested from that fund.

In Late July, AAC sold a 60 percent stake in TGI Friday’s to Carlson restaurants for £60 million, generating a return of 3.8x on its original investment.

AAC focuses on buyouts within the €50 million-€500 million range and has €1.7 billion in total funds under management.

Graphite provides private equity capital to mid-market companies in the UK, focusing on management buyouts, buy-ins, expansion capital, replacement capital and turnaround opportunities. The firm invests in transactions with enterprise values between £25 million to £200 million, and manages more than £1.1 billion through three private funds and the publicly-quoted Graphite Enterprise Trust PLC.