Bapcor share price on watch after latest takeover

The Bapcor Ltd (ASX: BAP) share price is one to watch in early trade after the company's latest automotive parts acquisition for $48 million.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Bapcor Ltd (ASX: BAP) share price is on watch this morning after a key acquisition announcement by the Aussie automotive group. 

What did Bapcor announce?

Bapcor has signed agreements to purchase both Truckline and Diesel Drive for a combined $48 million.

Truckline is an Aussie heavy commercial truck spare parts business operating around Australia with revenues of around $100 million.

Diesel Drive is a Sydney-based Japanese commercial truck spare parts business with revenues of approximately $13 million.

The acquisitions are to set to expand Bapcor's existing wholesale business and grow its footprint in Japan.

The Bapcor share price will be one to watch in early trade today following the expansion news.

How will Bapcor fund the purchase?

The company is expected to use $48 million from its existing debt facilities.

Bapcor expects to achieve a return on investment (ROI) of at least 15% in the first year of full operation in FY21.

The acquisition is in line with Bapcor's strategic direction as it looks to build out its Japanese footprint.

How will the Bapcor share price react?

It's often hard to tell which way the market will go with acquisitions and the Bapcor share price will be on watch this morning.

Bapcor shares could climb higher in early trade given the high potential ROI forecast by management.

Bapcor boasts a market cap of $2.03 billion and recently posted a $94.3 pro-forma net profit in August 2019.

The $48 million purchase price does seem like a drop in the ocean for the Aussie automotive parts supplier.

How has the Bapcor share price performed in 2019?

The Bapcor share price has climbed 22.22% higher so far this year to just outperform the S&P/ASX 200 Index (INDEXASX: XJO).

The company's shares opened today at $7.15 per share and have already lifted to $7.22 at time of writing, trading at 21.07x earnings with a 2.35% net dividend yield.

Bapcor's market cap currently sits at approximately $2 billion at the time of writing.

Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Mergers & Acquisitions

A man sits in a chair hunched over a laptop and covered head to toe in frozen icicles to represent Envirosuite's trading halt
Mergers & Acquisitions

APM share price placed on ice as $1.8 billion deal goes dud

It's all question marks and raised eyebrows for shareholders of this ASX company today.

Read more »

Young man sitting at a table in front of a row of pokie machines staring intently at a laptop. looking at the Crown Resorts share price
Mergers & Acquisitions

Could Star Entertainment shares be next in line to catch a takeover bid?

Star shares have been battered, but could a buyout be coming?

Read more »

Contented looking man leans back in his chair at his desk and smiles.
Bank Shares

Own CBA shares? Here's the tech stock the banking giant just invested in

CBA has made an interesting investment. Here's what you need to know.

Read more »

Man pointing at a blue rising share price graph.
Mergers & Acquisitions

Guess which ASX 300 stock is rocketing 10% on a $985 million cash bid!

Investors are piling into the ASX 300 stock on the back of a $985 million cash takeover bid.

Read more »

Shot of a scientist using a computer while conducting research in a laboratory.
Mergers & Acquisitions

Guess which ASX blue-chip share is throwing $202 million at another acquisition

This Aussie healthcare company is growing its presence in Switzerland.

Read more »

A man stands with his arms crossed in an X shape.
Mergers & Acquisitions

Boral share price falls after rejecting Seven Group takeover

The offer 'undervalues' Boral according to its committee.

Read more »

Miner looking at a tablet.
Materials Shares

Mineral Resources share price marching higher on new lithium project acquisition

ASX 200 investors are bidding up the Mineral Resources share price on Monday.

Read more »

A man sitting at a computer is blown away by what he's seeing on the screen, hair and tie whooshing back as he screams argh in panic.
Technology Shares

Appen shares plunges 17% after takeover collapse

Well that didn't take long...

Read more »