End of an era for iconic South African company
Japan-based Marubeni Corporation has agreed to acquire TiAuto Investments, the owner of Tiger Wheel and Tyre, ending 10 years of ownership by Old Mutual Private Equity (OMPE) and Carlyle.
The deal will mark Marubeni’s first entry into the car maintenance business in Africa, having already established operations in Thailand, Indonesia and Mexico.
As part of its plans to further expand its business, Marubeni has studied regions where car-related markets, such as new-car sales, vehicle ownership, and replacement tyre sales, have grown.
Looking to expand in South Africa, Marubeni has been evaluating investment opportunities in the region for several years.
With South Africa having the largest automobile market in Africa and its car maintenance market growing at an annual rate of about 6%, it is considered the best market in Africa.
The company will look to deploy Thailand’s B-Quik business model in the South African market, which is why it acquired TiAuto.
TiAuto was established in 1967 and currently operates 161 stores across South Africa, Botswana, Namibia, Zimbabwe, and Zambia.
While many of its competitors operate a franchise model, TiAuto primarily works with directly managed stores.
Marubeni said this allows TiAuto to provide high-quality, uniform maintenance services and achieve industry-leading sales per store in South Africa.
It added that TiAuto has created a loyal customer base through its wheel repair services that competitors do not offer, and by implementing a multi-brand strategy that includes a host of product brands and prices.
The focus will now be on combining TiAuto’s strengths with Marubeni’s expertise developed in its B-Quik model.
Marubeni will look to enhance marketing and promotional initiatives to increase brand awareness and customer traffic, and to improve services in line with customer needs to boost profitability.
Via these initiatives, Marubeni aims to further enhance profitability and add value while expanding its store network.
“This Transaction is intended to leverage Marubeni’s expertise and track record to provide high-value-added car maintenance services in the growing African automobile market,” the company said.
With the acquisition of TiAuto as a consolidated subsidiary, the total number of stores under Marubeni’s car maintenance business will increase to around 540.
Old Mutual and Carlyle say goodbye
The deal marks the end of TiAuto’s ownership by OMPE and American investment firm Carlyle, with the latter advised by Alterra Capital Partners.
The group said that TiAuto is the market leader in its sector, generating annual combined group and franchisee sales of around R4.5 billion.
“This exit represents not just the realisation of a successful investment but evidences the power of partnership and the value created through patient, hands-on stewardship,” said Jacci Myburgh of OMPE.
“The management team’s focus on service and operational discipline has set new benchmarks in the industry, and we are confident that Marubeni’s acquisition marks the beginning of an exciting new chapter.”
Eric Kump, Managing Director at Alterra Capital Partners, said that TiAuto is a world-class Southern African company and Marubeni is investing to make it a pan-African champion.
Alex Taplin, CEO of TiAuto, said that the group is delighted to be joining Marubeni, calling it one of the leading trading firms in Japan.
“This partnership will help us achieve our goal of significantly expanding our presence across Africa,” said Taplin.
TiAuto’s history dates back to 1972, when motor racer Eddie Keizan bought what was to become Tiger Sport Wheels with his prize money from winning the Formula 5000 Championship.
The company would become TiAuto Investments. Keizan stepped down as CEO in 2008 and remained actively involved as a non-Executive Director.
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