Simpar Proposes Innovative Merger to Create Brazil’s First Listed Vehicle Dealership Group

Simpar, the holding company of Vamos, has proposed a groundbreaking business restructuring plan. The proposal aims to separate Vamos’ dealership division and merge it with Automob, another Simpar subsidiary.

This strategic move would create Brazil’s first publicly listed vehicle dealership company. Vamos, primarily known for truck and equipment rentals, also operates a significant dealership segment.

This division generated R$693.5 ($130) million in revenue during the second quarter of 2023, accounting for nearly one-third of the company’s total net revenue.

The proposed merger would combine Vamos’ 72 dealerships with Automob’s existing 120 locations. The resulting entity would boast 192 stores across 12 states, representing 34 different brands.

This new company would maintain the Automob brand and seek listing on the Brazilian stock exchange. Simpar explained that this restructuring addresses investor demands for clearer investment theses and more focused capital allocation.

The separation would allow Vamos to concentrate on its core rental business while creating a dedicated dealership powerhouse.

Automob’s Financial Metrics

The new Automob would start with impressive financial metrics. It reported a gross revenue of R$12.7 ($2.3) billion and an EBITDA of R$418 million over the 12 months ending in the second quarter of 2023.

Under the proposed terms, Vamos shareholders would receive shares in the new dealership subsidiary through dividends and a spin-off process. Vamos Dealerships would then acquire a portion of Simpar’s stake in Automob for R$1 billion.

After the restructuring, Simpar would hold a 64.12% stake in the new Automob. Vamos Rental’s minority shareholders would own 21.39%, with Automob’s existing minority shareholders retaining 14.49%.

Antonio Barreto, currently Automob‘s CEO, will lead the new company. Gustavo Couto would continue as CEO of the streamlined Vamos rental business.

If the proposal proceeds as planned, Vamos shareholders may vote on the restructuring by late November 2024. This innovative approach would achieve Automob’s stock market listing without the need for an initial public offering.

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