LONDON -- Private equity group CVC said on Friday it agreed to sell its British tire and exhaust business Kwik-Fit to a division of European private equity firm PAI for 800 million pounds ($1.5 billion) including debt.
Kwik-Fit is Europe's biggest independent auto parts, repair and replacement specialist, with over 1,900 outlets, including Speedy in France and Pit Stop in Germany.
PAI, which is buying Kwik-Fit through its Speedy 1 division, beat out rivals U.S. buyout giant Kohlberg Kravis Roberts & Co and Japanese tire maker Bridgestone in a closely fought auction, a source close to the process said.
"PAI came out on top. They were ready to sign last night and we took the deal," the source said.
Kwik-Fit, famous for its "You can't get better than a Kwik-Fit fitter" ad campaign, hired Deutsche Bank in February to consider its options, including what would have been one of the biggest flotations in London in recent years.
CVC acquired the business in 1999 from Ford Motor Co. for 330 million pounds, after Ford bought it in 2002 for over $1 billion.
Ford retained a 19-percent stake in the business, management held 11 percent, while CVC owned the rest, the source said, adding that 100 percent of the company is being sold to PAI. It was not immediately clear, however, how much of the 800 million pounds PAI paid was debt already on Kwik-Fit's books.
Under the deal, existing management, including Chief Executive Ian Fraser, will put up fresh equity and retain a small stake in the business, another source said.
"PAI intends to support the management team to further strengthen Kwik-Fit's leading position in the fast-fit European market," PAI partner Hamish Mackenzie said in a statement.
Kwik-Fit's first outlet opened in Edinburgh in 1971, followed two years later by its first European center.
Today the company has 11,000 employees and reported 2003 turnover of $1.4 billion.