Bikenet acquires the 12 Car Clinics for about £3m with a premium payable in instalments over four years from 2004. Renamed Just Car Clinics, the firm will be based in York and listed on the alternative investment market.
Barry Whittles, Dixon operations director of bodyshops, made the offer to the board to buy the business and will now become chief executive. The transaction includes a long-term agreement to supply cars and parts for the ongoing benefit of both businesses.
Bikenet chairman David Hickey, previously deputy chairman of Dixon, stays on as chairman and Dixon finance director Chris Elton becomes finance director. Whittles and Elton will buy shares worth 12.5 per cent in the new company. Bikenet was spun out of Hull-based Dixon in 2000 but faced tough economic conditions and failed to make an impact in the bike market. It blamed this on the rising cost of insurance premiums as well as manufacturer-imposed price rises.
But the business turned a corner in February when the company revealed plans to seek reverse take-over candidates and in December it called for its shares to be suspended as negotiations began to bear fruit.
Dixon was acquired by the Lombard subsidiary of Royal Bank of Scotland earlier this year. Management now wants to focus on using the muscle of its new owner to expand its core car retail business. In addition, RBS owns Direct Line, which operates a four-outlet bodyshop network.
Paul Dixon, chairman, says: “Dixon Car Clinics has always been a highly successful and profitable division and has been equally ambitious to grow.
“The recent acquisition of Dixon by Lombard, the asset finance group in RBS, has created an increased focus on our retail businesses.”
Car Clinics was not seen as a core business, despite making an operating profit of £1m on a turnover of £18.2m. The business has made a profit of more than £700,000 in each of the last three years.