Delta Auto Ltd., an investment vehicle of individual shareholders, has sold Delta Motor Groups’s import and distribution business in Finland to Bergé Auto. Financial details have not been disclosed.
Delta Motor Group Oy imports Kia and Mitsubishi vehicles and service parts. The company was founded in 1937 and has approximately 90 employees. In 2004, Delta introduced Kia, one of the fastest growing car brands in Europe, in Finland. Delta has been importing Mitsubishi cars since January 2011.
Headquartered in Spain, Bergé Auto, a subsidiary of Bergé y Cia., is a leading automotive distributor in Europe and Latin America. Since 1979, Bergé Auto has established itself as a strategic, long-term partner for most of the world-leading brands, sharing a common goal: building a meaningful, long-lasting relationship with its customers. Bergé y Cia., founded in 1870, is a leading international corporation in areas such as logistics, maritime and port services.
Oaklins’ team in Germany advised the seller in this transaction. The team in Spain identified the buyer and the Dutch team supported the transaction in its early stages.
Martin Kanjuh, Director at Oaklins Germany (Project Lead).
Martin executed several transactions within the automotive sector. Besides being expert for complex cross border transactions, he has a strong transaction track record within the Software and Fintech industry.
“Automotive distribution is within a highly competitive market environment still an attractive sector for strategic buyers. The major clue in successfully executing a transaction within this sector is a strong and deep understanding of the transaction drivers of each relevant player as well as profound and dedicated transaction execution expertise. The acquisition of Delta by Bergé enables Delta to further develop business opportunities on the Finnish and Scandinavian market.”
David Klonecki, Senior Associate at Oaklins Germany (Project Management).
David has gained strong expertise in the fields of automotive and distribution business. He managed the operational tasks within the framework of the transaction process.
“The valuation range in this industry varies a lot but good positioned companies receive highly attractive valuations. Value drivers have to be identified on a case by case level and promoted with the right timing during a structured process.
Were there any unexpected difficulties? How did you overcome them?
Since the transaction was well prepared on the financial as well as on the legal side, we did not face major unexpected difficulties. One big challenge from a financial adviser’s point of view was to keep the transaction momentum within a narrow buyer’s universe over a timeframe of 12 months until the day of signing.
Are there any extra precautions you must take when a transaction involves company, such as Delta Motor Group, which distributes well established and known vehicles?
Yes of course. The major success factor and at the same time obstacle to overcome is to align the different interests of each single party involved and manage them within a structured sales process. A competitive M&A process for a business with high complexity that has significant exposure to strong stakeholders like OEMs on the supply end, and retail chains on the delivery end, as well as banks being part of the business model in terms of inventory financing, has to be worked out well and executed in the minutest details. Since the most attractive buyers are at the same time competitors operating in other geographical regions, only, it is essential to share information among interested parties (incl. stakeholders) very carefully in terms of quality as well as timing. Selecting a buyer’s universe which combines necessary business know how, operating and financial resources to buy and grow the business with showing the highest chance to be accepted as “partner” of the mighty OEMs becomes the magic box to successfully close the transaction. On top of that we had to find a buyer who is a reliable future business partner, since the retail business of Delta still remains with the sellers.