SAO PAULO, Dec 17 (Reuters) - Private equity firm Advent International Corp said on Tuesday it had bought Brazilian auto parts retailer Rondobras, with 54 stores, its latest such acquisition in Latin America’s largest economy.
Advent did not disclose the purchase price, but said it had already invested 1.2 billion reais ($285.96 million) in acquisitions, distribution centers and new stores since its 2016 purchase of unlisted FortBras, its initial Brazilian auto parts takeover.
Rondobras’ outlets will be incorporated into Fortbras, making it Brazil’s largest such retailer with about 130 stores, but still a small segment of the country’s 35,000 auto parts stores.
FortBras’ revenue is expected to reach 2.2 billion reais in 2020. That compares with estimated revenue of 28 billion reais for Brazil’s auto parts makers, according to the sector’s main union.
Rondobras, based in Brazil’s north region, will also expand Fortbras’ footprint from the southeast region.
“Auto parts retailing has flown below the radar for years and years in Brazil,” said Wilson Rosa, Advent’s managing director. “I see Fortbras potentially reaching 1,000 stores.”
The company plans to open 18 new stores in 2020, and Rosa has not ruled out more acquisitions.
Listed auto parts retailer such as Autozone Inc, O’Reilly Automotive Inc and Genuine Parts Co provide some inspiration for Advent’s ambitious plans.
An auto parts business provides a hedge against economic cycles, said Rosa, noting that consumers are less likely to acquire new cars during downturns but are still obliged to spend periodically to keep their aging clunkers on the road. ($1 = 4.1964 reais) (Reporting by Carolina Mandl; Editing by Richard Chang)