Advisers look at Kwik Fit sale

Earlier this year PAI, the French private equity group which now owns the Broxburn-based company, signalled it was considering disposing of the business following the sale of the financial services arm to insurance group Fortis for 215m.

It is understood that a number of trade and financial buyers have expressed interest in the company with names including Bridgestone and Michelin, which owns rival ATS Euromaster, linked to a possible deal.

Advisers, thought to be Credit Suisse and Morgan Stanley, have now been appointed to look at options for the future of the business.

Although PAI has declined to comment on the situation, a source close to Kwik Fit stressed that a sale was only one option. "The business is performing strongly and there is no pressure to achieve a sale.

"The review is about looking at all the options for the future of the business."

In the first half of 2010, Kwik Fit group achieved sales of 485.5m, an increase of 6.2 per cent compared to the same period in 2009.

Operating profit was up by 10.4 per cent at 41.4m.

Despite the difficult economic environment, the company has benefited from motorists looking to maintain their current vehicles rather than buy new ones.

The firm has also seen strong growth from the launch of new products away from its core tyre and exhaust fitting services including MOTs and servicing. Its French and Dutch fast-fit businesses are also seeing expansion.

The company was founded in Edinburgh by Farmer in 1971 and grew to become the world's largest independent tyres and repairs company.

The Scots entrepreneur sold Kwik Fit to Ford in 1999 for some 1 billion.

A decision by Ford to offload what it considered to be "non-core" businesses in 2002 led to its sale to private equity house CVC Capital Partners, which later sold it to PAI in an 800m deal.

The sale in July of the insurance arm, which employs more than 1,000 people, was reported to have reduced the group's debts to 486m.