Suncorp is looking to get the best price possible for Capital SMART by offering to underwrite a minimum volume through the smash repairs business.
Suncorp said the sale of Capital SMART will come with a 25-year contract that would ensure the insurer's referrals into the network plus a minimum level of business that will be supported by the ASX-listed insurance giant.
The contract, which includes a fixed-year term and two five-year options, was detailed in a flyer sent to potential buyers by Luminis Partners, which was tasked to run a two-part auction for the second-biggest player in Australia’s fragmented smash repairs market, Street Talk reported.
The flyer, released at an auction for Capital SMART following a long-running strategic review, included an eight-point pitch, detailing: the size of smash repairs market ($5.2 billion a year) and its underlying growth; Capital SMART's position as a leading player; the business' industry-leading efficiency; base volumes supported by Suncorp; the company's platform for growth; its highly cash-generative business; an expansion plan and history opening new sites, and its strong management team.
It also informed interested parties that the business makes about $30 million a year at the EBITDA line, though it didn’t contain much details on the business’ finances.
Read more: Suncorp commences strategic review of smash repairer investment
Sale documents are expected to be out by mid-June, Street Talk said.
