Japan's Marubeni buys Tiger Wheel & Tyre owner TiAuto in landmark South Africa deal

Japan's Marubeni Corporation has acquired TiAuto Investments, the South African company that operates the Tiger Wheel & Tyre and Tyres & More retail chains, in a deal that Bloomberg reported was valued at approximately $149 million. The transaction marks Marubeni's first entry into the African automotive parts and car maintenance market and represents one of its most significant investments in South Africa to date.

TiAuto chief executive officer Alex Taplin called it a defining moment for the business, which has been trading across the continent since 1967.

"We are delighted to be joining forces with Marubeni, one of the leading trading firms in Japan with significant experience in the tyre retail sector in Asia," Taplin said. "This partnership will help us reach our goal of growing our presence significantly across Africa."

The deal brings to a close a decade-long ownership chapter under Carlyle and Old Mutual Private Equity, which acquired TiAuto and oversaw its transformation from a well-known South African retailer into a pan-African operation. TiAuto now runs more than 160 outlets across South Africa, Botswana, Zambia, Zimbabwe and Namibia, and generates annual combined group and franchisee sales of around 4.5 billion rand.

Old Mutual Private Equity co-head Jacci Myburgh described the exit as evidence of what patient, hands-on investment stewardship can produce.

"The management team's focus on service and operational discipline has set new benchmarks in the industry," Myburgh said, "and we are confident Marubeni's acquisition marks the beginning of an exciting new chapter."

For Marubeni, the move follows a well-worn playbook. The Tokyo-listed trading conglomerate entered the car maintenance business in Thailand in 2006 through the acquisition of B-Quik, which provides one-stop sales and replacement of tires, oil, batteries and related items. Since that acquisition, B-Quik has grown from 44 to 241 stores. Marubeni has since replicated the B-Quik model in Indonesia and Mexico. TiAuto is the next geography in that expansion arc.

South Africa's car maintenance market has been growing at an annual rate of approximately 6%, and the country is the largest automobile market on the continent. Marubeni said it had been studying investment opportunities in the region for several years before settling on TiAuto as the vehicle to deploy its proven retail model. With TiAuto now consolidated as a subsidiary, the total number of stores under Marubeni's car maintenance business will increase to approximately 540.

Alterra Capital Partners, the pan-African private equity firm that advised on the deal, said the transaction reinforced TiAuto's standing as a world-class business with an international profile.

"We are pleased Marubeni is investing to make it a pan-African champion," said Eric Kump, managing director at Alterra Capital Partners.

Taplin said the transaction would give TiAuto access to global expertise and international best practices while preserving the local leadership and customer-centered culture that have defined the business across nearly six decades.