South Africa: Sanlam Private Equity invests in Danny’s Auto
Sanlam Private Equity (SPE) has acquired a majority stake in Danny’s Auto Body Parts, a provider of a wide range of aftermarket automotive parts and accessories for various vehicle types and models in South Africa and other sub-Saharan countries. SPE made the acquisition through its private equity fund, SPE Mid-Market Fund I.
Paul Moeketsi, managing partner at SPE, says, “We are excited to announce our investment in Danny’s Auto. 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.”
He explains the deal has been made at a time of exceptional growth opportunities in the automotive aftermarket industry, “The need for mobility has reverted to pre-Covid levels. However, the pandemic and economic downturn means the new car market has slowed, with local vehicle production being geared towards export markets and people owning cars for longer, which increases the demand and frequency for aftermarket vehicle repairs and maintenance. Coupled with this, the Competition Commission’s introduction of the right-to-repair guidelines will see the removal of restrictions imposed by original equipment manufacturers (OEM) regarding service providers and replacement parts for under-warranty vehicles. The new guidelines allow car owners to choose an independent service provider for repairs and maintenance without automatically losing warranty coverage.”
The guidelines align with global trends of deregulating the automotive industry to provide consumers with greater flexibility to repair and service their vehicles, sparking increased demand for aftermarket service providers. “With its existing scale and brand quality, Danny’s Auto is well positioned to capitalise on this opportunity through its established network and extensive access to a wide range of affordable international automotive content.”
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