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Sanlam Private Equity (SPE), the private equity arm of Sanlam Investments, has purchased a majority stake in Danny’s Auto Body Parts. The company is a prominent provider of premium aftermarket automotive parts and accessories, catering to a wide variety of vehicles in South Africa and numerous other sub-Saharan nations.
This acquisition has been achieved via the SPE Mid-Market Fund I and signifies SPE’s dedication to bolstering job creation and promoting accessibility in vehicle maintenance and repair.
Danny’s Auto, headquartered in Springfield, Gauteng, boasts a robust 76-year history of success in wholesaling aftermarket automotive parts and spares. Additionally, the company is now crafting its line of products, including the brand Imoto Chemicals.
With an expansive inventory exceeding 30 000 items and strategic alliances with top-tier brands such as Dunlop, Lucas Automotive, and FIAMM Energy Technology, Danny’s Auto has garnered a reputation as a reliable supplier to wholesalers and automotive retail outlets.
Expressing his enthusiasm about the recent investment, Paul Moeketsi, managing partner at SPE, said, “This strategic move aligns with our investment strategy of supporting established businesses with strong growth potential. We believe that our partnership with Danny’s Auto will create significant value and contribute to the continued success of the company and positively impact the business and the industry.”
Moeketsi also mentioned that the deal was timed perfectly to capitalise on the booming opportunities in the automotive aftermarket industry. He cited several factors, including the pandemic-induced economic downturn, which slowed down the new car market, coupled with the reintroduction of the right-to-repair guidelines by the Competition Commission.
The new regulations allow car owners to choose an independent service provider for repairs and maintenance without risking their warranty coverage, which is expected to increase demand for aftermarket vehicle repairs and maintenance.
Gift Pule, principal at SPE, stated that the acquisition would significantly contribute to Sanlam Investments’ commitment to investing for impact.
He said, “The business is poised for significant growth over the next five years and is expected to grow direct employment by between 16% and 26%. Beyond the direct employment growth, significant upstream value chain jobs and an estimated 300 downstream jobs in the wholesale, retail, and vehicle repair markets are expected to be supported within the next five years.”
Danny’s Auto, which supports over 3 400 mostly owner-managed wholesalers, retailers, and parts shops located mainly in lower LSM communities, will continue to empower local businesses and contribute to economic growth through its extensive supply chain, strategic partnerships with international brands, and a comprehensive understanding of the local car industry.
Chief executive of Danny’s Auto, Ahmed Ismail, shared his optimism about the investment, stating, “We are thrilled to have Sanlam Private Equity as our partner. Their expertise, network, and financial support will empower us to capitalise on new growth opportunities, expand our product offering and markets, and further strengthen our competitive position in the industry. This investment marks an important milestone for Danny’s Auto, and we look forward to a fruitful collaboration.”
This investment by SPE is the fifth deal by the SPE Mid-Market Fund I, following successful investments in the Cavalier Group, the Absolute Pets retail chain, Q Link, a fin-tech provider of payment application software, and SkipWaste, an integrated waste management and alternative disposal business.