Stock With 700% Spurt Seeks to Double Collision-Repair Revenue

(Bloomberg) -- Boyd Group Income Fund, the owner of collision-repair shops whose stock has risen eight-fold over the past five years, sees its biggest purchase helping it double revenue by 2020.

The company gets the vast majority of its income from the U.S., but that will change with the C$193.6 million ($144 million) acquisition of Assured Automotive Inc., announced Monday. It expands Boyd's Ontario locations to 69 from one and more than doubles its total presence in Canada.

"It gives us an existing geographic footprint" and an opportunity to grow in eastern Canada, Chief Executive Officer Brock Bulbuck said in a phone interview Tuesday. The company is considering Quebec which, together with Ontario, accounts for half of Canada's collision-repair market, he said.

Boyd's shares jumped 9.8 percent on news of the deal Monday and added another 0.9 percent Tuesday. The stock has gained 742 percent including dividend over the past five years compared with 56 percent for the S&P/TSX Composite Index. Assured is the largest operator of non-franchised collision repair centers in Canada, which Boyd bought for C$146.1 million cash and C$47.5 million in shares.

Winnipeg, Manitoba-based Boyd has announced 15 acquisitions worth about $325 million since mid-2012, of which the Assured purchase is by far the biggest, according to Bloomberg data. Boyd will have a net debt-to-EBITDA ratio of about 1.5 once the deal closes -- one of the lowest among its peers, the data show -- leaving it with "plenty of dry powder" to do more acquisitions, Steve Hansen, an analyst at Raymond James Financial Inc., wrote in a note.

Boyd's goal is to double 2015 revenue by 2020 through tuck-in acquisitions and possibly more large takeovers, though that target is looking "increasingly conservative" and may need to be revised, Hansen wrote.

"We certainly feel confident that our deal pipeline is more than adequate to allow us to deliver on our stated growth plan," CEO Bulbuck said.

To contact the reporter on this story: Kristine Owram in Toronto at kowram@bloomberg.net.

To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net, Jeanette Rodrigues, David Scanlan