HgCapital snaps up UK car parts firms for expansion

Michael Bow
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ON based private equity firm HgCapital is eyeing plans to create a national network of car parts distributors after kicking off a spending spree on small independent outfits across the UK.

The business has just completed its fourth separate investment in a car parts distributor in as many months, after taking a stake in GMF Motor Factors, a distributor of components and garage equipment in South Wales, Gloucestershire and Herefordshire.

It is understood the group, which was formed from the private equity arm of defunct FTSE 100 fund manager Mercury Asset Management, is mulling plans to acquire more independent distributors across the UK, as it bids to add scale to the notoriously fragmented parts distribution market.

So far the firm has been targetting investments in companies from The Parts Alliance (TPA), a Midlands-based consortium of 13 autoparts companies across the UK.

HgCapital has taken three major stakes in TPA companies since August. It has invested in Allparts Automotive, CES UK, and SC Motor Factors, in addition to its GMF stake. Terms have not been disclosed.

It is thought HgCapital is considering buying others in the consortium in the coming months, but it is not known how many of the 13 could be acquired.