The purchase of the Rolf car dealer company by Sergei Petrov by the Klyuchavto holding from the Krasnodar Territory is the largest M&A deal in the history of Russian auto retail. In fact, the owners of Klyuchavto will have the first and fourth players on the market.
On December 13, Alfa-Bank announced that Rolf and its subsidiaries would be consolidated within the united group SBSV-Klyuchavto. The bank was a financial advisor and partially financed the purchase. It is noted that Rolf’s current contracts with car manufacturers will be preserved, the company will fully fulfill its current obligations to suppliers, customers and creditors.
The transaction price was determined based on the market multiple to EBITDA, including historical and forecast indicators with inherent growth, a representative of Rolf explained to Vedomosti. The group’s EBITDA in the first half of 2021 almost quadrupled to RUB 14.5 billion. The final price is subject to a series of agreed adjustments for Rolf’s actual positions on net debt and working capital, the source added.
The deal will be financed by the company’s own funds and a long-term loan from Alfa-Bank, the credit institution said. The Bank entered into an agreement with Klyuchavto to provide a long-term loan in the form of a syndicated loan in Russian law to finance the transaction and refinance part of the current financial obligations of the combined company. The amount of the deal was not disclosed. On December 13, the parties signed legally binding documents. The transaction is expected to close in the first quarter of 2022.
Before the deal, Klyuchavto, which operates mainly in the regions, was almost 2.5 times inferior in turnover to Rolf, according to the data of Avtobiznesrevyu. The revenue of the Klyuchavto Group of Companies for the first half of 2021 increased by 52% to 69 billion rubles. Rolf’s revenue under IFRS during this period almost doubled to 167 billion rubles, net profit – nine times to 9.9 billion rubles. Net debt decreased by 21% to RUB 16.7 billion. The ratio of net debt to EBITDA as of June 30 dropped to 0.63 from 2.64 a year earlier, the company said.
According to its own data, Klyuchavto has 108 dealerships in 15 regions. Rolf has 59 dealerships in Moscow and St. Petersburg. According to the results of the first half of the year, Rolf sold 40 144 new cars and 42 931 used cars, which is 29% and 73% more than the first half of 2020, respectively.
The new owner of “Rolf” – “Klyuchavto” is owned by the family of businessman Viktor Sergeev and his partners, follows from the information of “SPARK-Interfax”. Sergeev himself owns 23% of the group, 10% of his son Anton, 7% of his wife Lydia. Another 30% – from Vera Barinova, 15.5% – from Yuri Storozhev and the remaining 14.5% – from Vera Krasova.
Sergey Burgazliev, an independent consultant for the automotive industry, evaluates Rolf’s operating performance as good and believes that the group has sufficient funds to service its debts. Most likely, with this deal, the parties will simply partially cover the debts of Rolf and Klyuchavto to banks, and this will be an even larger asset in the Russian car market, the analyst notes. The amount of the transaction, taking into account the cost of Rolf’s dealerships, the volume of the company’s short-term and long-term liabilities, as well as the discount in connection with the claims of the Prosecutor General’s Office against the dealer holding, may amount to 35-50 billion rubles, Burgazliev estimated for Vedomosti. But the purchase still has to be approved by the FAS, stresses the representative of Rolf.
The deal will allow the combined company to increase the stability of the business and diversify the geography of sales with a significant expansion of the regions of presence and strengthening of business in Moscow and St. Petersburg, the auto dealers said in a statement. Now “Klyuchavto” has only 14 salons in Moscow, the Moscow region and St. Petersburg, while “Rolf” is focused exclusively on these regions. “We strive to preserve both the Rolf brand in Moscow and St. Petersburg and the dealer’s accumulated experience and human capital at all levels and are confident in the successful further development of the merged company,” says Viktor Sergeev, CEO and co-owner of Klyuchavto (his words are given in the company’s message).
The strategy for further development assumes the introduction of best corporate governance practices and the IPO of the combined company within three years from the date of the closing of the deal, the companies also said. At the same time, earlier in December, the general director of Rolf Svetlana Vinogradova said in an interview with Bloomberg that Rolf is considering the possibility of an IPO in the second half of 2022. Forbes, Rolf founder Sergei Petrov. In his opinion, this is a good start for an IPO.
Compounding Rolf’s position is the criminal case opened in 2019 against Petrov, director of Rolf’s business development department Anatoly Kairo, ex-general director of the dealer holding Tatyana Lukovetskaya and the head of Panabel Limited, Cyprus controlled by Rolf, Georgy Kafkali. It is connected with suspicions of the withdrawal of the company’s funds abroad. According to the investigation, the managers in 2014 illegally transferred 4 billion rubles to Panabel Limited. under the guise of a transaction for the sale and purchase of shares of another company included in the holding’s perimeter – Rolf Estate. But the value of the asset, according to the investigators, was many times overstated and the real price of the shares did not exceed 200 million rubles. Petrov objected, insisting on an adequate share price.
As part of this case, the Prosecutor General’s Office filed a lawsuit with the Khimki District Court to recover 12.85 billion rubles from the dealer holding and its main owner. At the same time, the court took interim measures in the form of the arrest of Rolf’s property within the amount of the claim. The blocking of funds caused a restriction in the purchase of used cars by Rolf from the market, RBC wrote with reference to Vinogradova. The volume of claims by the Prosecutor General’s Office is greater than the balance of funds at the end of the first half of the year in Rolf’s accounts, which reached 11.16 billion rubles. But a source close to the company told Vedomosti that the dealer still has large unspent limits on existing credit lines, through which it is possible to replenish working capital.
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