Searchlight preps automotive diagnostics company Opus Group for sale

The New York-based PE sponsor has engaged a cross-border investment bank to target prospective buyers, including US and European private equity sponsors.

Searchlight Capital Partners is gearing its Swedish automotive diagnostics company Opus Group for sale. The sponsor expects to launch a sale process of the company within the next week, sources familiar with the matter told affiliate title PE Hub.

Searchlight recently engaged a cross-border investment bank to target prospective buyers, including US and European private equity sponsors, the sources said. Opus Group, which was publicly traded before a 2018 take-private acquisition by Searchlight, is being marketed off of $50 million in EBITDA generated over the past year.

Because a portion of the company’s holdings are technology-enabled, one source said that the sponsor could be seeking a slightly higher exit multiple than the 10x-11x EBITDA valuation automotive services companies have been hitting in recent sales.

Opus Group operates automotive diagnostics and emissions control centres in North America and Europe. The Gothenburg-based company operates a diagnostics technology product group, Intelligent Vehicle Support, which includes the DriveCrash diagnostics tool. Opus’ diagnostics and inspections service centres do business as Environmental Systems Products and Gordon-Darby, respectively. Title and registration services are provided under the Opus VTR brand, while Opus RSE provides traffic emissions monitoring solutions.

PE firms invested in automotive services include CenterOak Partners, MiddleGround Capital, Gemspring Capital, O2 Investment Partners, Kinderhook and HCI Equity Partners.

Automotive services and original equipment manufacturer M&A activity has recently picked up, with numerous catalysts for increased PE buyouts this year.

At the time of its 2018 acquisition by New York-based Searchlight, Opus Group generated SKr500 million (€48 million) EBITDA from SKr2.5 billion of revenue. The company had more than 34 global offices from which it provided services.

Two sources said the financial performance of automotive services across the market has broadly remained flat or declined somewhat after the covid-19 pandemic. The global automotive testing and inspection market is still projected to expand at about 7 percent CAGR for the next few years as driving habits normalize post-pandemic.

Searchlight Capital teamed up with Opus’ then CEO Lothar Geilen in 2018 to acquire the outstanding shares of Opus Group through Ograi BidCo in a take-private transaction valued at SKr2.25 billion.

Searchlight Capital and Opus Group declined to comment for this report.