SAN FRANCISCO & FORT WORTH, Texas & ATLANTA - TPG, a global alternative asset firm, has reached a definitive agreement to purchase Classic Collision, a notable collision repair company, from New Mountain Capital. The transaction, for which financial terms were not disclosed, is anticipated to be finalized in the second quarter of 2024.
Classic Collision, established in 1983, operates 262 locations across 16 states, offering a range of services including auto body repairs and glass repair. Recognized for its certified expertise and strong industry relationships, Classic Collision caters to a diverse client base, including owners of premium and electric vehicles.
Toan Nguyen, CEO of Classic Collision, expressed confidence in TPG as the right partner to advance the company's growth. He also acknowledged New Mountain Capital's support in expanding the business. TPG's partner Paul Hackwell commended Classic Collision's customer satisfaction and operational excellence, looking forward to fostering the company's market presence and culture.
Under New Mountain Capital's ownership, Classic Collision has focused on enhancing customer service through investments in personnel, operations, and innovation. Ricardo Gonzalez and Robert Mulcare, Managing Directors at New Mountain Capital, praised the partnership's success and expressed optimism for Classic's future.
Goldman Sachs & Co LLC served as the exclusive financial advisor to Classic Collision and New Mountain Capital, while BofA Securities advised TPG. Legal counsel was provided by Kirkland & Ellis for the sellers and Debevoise & Plimpton LLP for TPG.
This acquisition aligns with TPG's extensive portfolio management, with $222 billion of assets under management, and New Mountain Capital's strategy of fostering business growth, managing approximately $50 billion in assets.
Information is based on a press release statement.
InvestingPro Insights
TPG's definitive agreement to acquire Classic Collision comes at a time when the company is navigating the financial markets with a notable market capitalization of $16.88 billion. Analysts have mixed expectations about TPG's financial performance, with some predicting a net income growth this year, which aligns with the strategic acquisition to expand its market presence. On the other hand, 8 analysts have revised their earnings estimates downwards for the upcoming period, suggesting that there may be challenges ahead.
Investors looking at TPG's valuation metrics will find a company that is trading at a high P/E ratio of 82.29 based on the last twelve months as of Q4 2023, indicating a premium relative to near-term earnings growth. Meanwhile, the firm's PEG ratio stands at 0.77, suggesting that its price may be justified by the expected earnings growth.
Despite concerns over a potential sales decline in the current year, TPG's financial stability is supported by a strong liquidity position, with liquid assets surpassing short-term obligations. This could provide a cushion for the company as it integrates Classic Collision into its operations.
For readers interested in deeper financial analysis and additional InvestingPro Tips, TPG's profile on InvestingPro offers more insights. There are currently 13 more InvestingPro Tips available, which can help investors make informed decisions. To access these insights, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
As TPG moves forward with its acquisition of Classic Collision, the company's recent stock price movements, which have seen a large uptick over the last six months, could be indicative of market optimism towards its growth strategy and operational initiatives.
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