After having been the engineering mastermind behind the hat-trick of Bathurst 1000 victories for the Holden Dealer Team in 1982, 1983 and 1984, Larry Perkins left the team in mid-1985 after disagreements with team boss Peter Brock over the direction of the team. At the time, Brock and his health professional Dr. Eric Dowker (a Chiropractor by profession) were moving into what many believed to be pseudoscience, which would eventually lead to the "Energy Polarizer" being fitted to the HDT's road cars, leading Holden to sever ties with the team. According to rumours that surfaced in mid-1985, Perkins allegedly found an Energy Polarizer attached to the HDT Commodore that he raced in the Lakeside round of the 1985 Australian Touring Car Championship. As part of his contract with the team, Perkins was in charge of the HDT's race car preparation and had final say on what was fitted to the cars. Although both Perkins and Brock maintained that the split was amicable, it was rumoured that the Lakeside incident was the final straw for Perkins who left the team at the end of the ATCC. After filling the roles of co-driver and engineer at Dick Johnson Racing in the endurance races where he partnered Dick Johnson at both Sandown and Bathurst in a Group A Ford Mustang and would actually qualify the team's spare Mustang in the top 10, but the car was withdrawn immediately after Hardies Heroes. Perkins then established Perkins Engineering out of a small factory in Roberna Street in the Melbourne suburb of Moorabbin commencing operations in early 1986.