FORD Motor Company is this week expected to announce the sale of Kwik-Fit, Europe’s largest car repair business, to London-based venture capitalists CVC Capital Partners for around £350 million-£400m.
CVC is believed to want to create synergies between Kwik-Fit and Halfords, the car accessories and bicycle retailer it bought from Boots for £410m last week.
The US car manufacturer is understood to have given in to pressure to accept deferred payments from CVC amounting to a sizeable portion of the sale price. Ford is also understood to be hanging onto a minority stake in Kwik-Fit, with a view to sharing in any upside in the business, for which it paid £1 billion in 1999.
The sale price is expected to come as a bitter disappointment to Ford, which had hoped to raise at least £800m.
Kwik-Fit — which became a household name after its advertising campaign “You can’t get better than a Kwik-Fit fitter” — was established by Sir Tom Farmer in 1971. But Farmer is expected to sever his ties with the business once the sale is completed.
Reports of possible accounting irregularities at Kwik-Fit are seen as one factor that has knocked down the sale price.
Uncertainty created by the European block exemption reform, covering car distribution and after-market servicing, is believed to have deterred trade bidders.
The decision to sell the chain was taken by Ford late last year after it ousted its chief executive Jac Nasser, the architect of a controversial “cradle to grave” diversification programme. He was replaced by William Clay Ford in the autumn.
CVC, which was unavailable for comment, has seen off competition from Apax Partners, Permira and Paribas Affaires Industrielles, part of BNP Paribas. The sale was overseen by Goldman Sachs.
This article was published in the Sunday Herald 28 July 2002