GUD dumps its pumps for $65m as it positions for rise of EVs
GUD Holdings will become a pure-play automotive products company with the $65 million sale of pumps company Davey Water Products, as the tow bar, oil filter and trailer parts group positions itself for the rise of electric vehicles.
The under-the-radar company, whose share price has risen by 45 per cent in the past 10 months to $10.11, is repositioning as it tries to future-proof its core automotive parts business.
It will use the proceeds of the Davey pumps sale to reduce debt and reinvest in a strategic shift into higher growth areas, chief executive Graeme Whickman said on Monday.
Utes, 4WDs and SUVs make up 70 per cent-plus of total new vehicle sales in Australia. GUD Holdings is repositioning to grow in auto parts and accessories which are in demand regardless of whether the engine is powered by petrol, diesel or electric batteries.
“This transaction simplifies the GUD group by becoming an automotive pure play and strengthens the group’s balance sheet by materially reducing debt,” Mr Whickman said.
GUD made a big strategic shift in late 2021 with the $745 million acquisition of Melbourne-based AutoPacific Group, which makes tow bars, roof racks, nudge bars and trailer parts for four-wheel drives, utes and SUVs. Those products are in demand regardless of whether the vehicle for which the accessories are bought has an internal combustion or electric engine.
Mr Whickman said on Monday that GUD had growth aspirations in the segments of 4WD accessories, lighting products, powertrains, under-car products and electric vehicles.
He said GUD would pursue organic growth and also look to make “financially and strategically compelling acquisitions”. Mr Whickman said there was a large pipeline of potential acquisitions, but
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