When AM approached Andy Grzesinski, Macrae & Dick’s managing director, he would only say: “We haven’t bought Glenvarigill.”
But sources close to both groups say negotiations are at an advanced stage, and the acquisition is imminent.
Edinburgh-based Glenvarigill, turnover £145m, holds franchises for Audi, Volkswagen, Honda and Peugeot and has seven dealerships in central and eastern Scotland. It is ranked 67 in the November 2005 AM 100, having dropped from 57th place.
Macrae & Dick, which has four Ford outlets plus an autopark with BMW, Mini, Honda, Jaguar and Land Rover franchises – as well as two MG Rover dealerships prior to its closure – is ranked 78 with turnover of £127m.
One industry observer says: “It’s been a while since we’ve seen acquisition activity from Macrae & Dick, but the group is in a strong position. Grzesinski could be the man to sort Glenvarigill out, and the move will allow him to broaden his business across Scotland.”
Inverness-based Macrae & Dick has been growing steadily, but quietly, in the mainland north and isles. In 2004 it increased turnover by £1.5m and posted a £2.25m profit, up £150,000 on the previous year. Its last acquisition was the Frews Ford franchise in Perth in July 2000.
In contrast, Glenvarigill has endured a high profile fall from grace in recent years. Founded in 1966 by the McKinnon family, proprietors of the Drambuie liqueur company, it had been independent since a management buyout in July 2002, supported to the tune of £20m by Bank of Scotland.
Then its chief executive, Tim Bartlett, who had been with the business since 1993 and led the MBO, quit in December when the bank installed one of its own administrators to run the business alongside finance director Kevin Lamb. Lamb is Glenvarigill’s third finance director since the MBO.
Glenvarigill had been in difficulties since posting a pre-tax loss of £5.3m in 2003, converted to operating losses of £1.7m. In a bid to cut its debts in 2004, it sold its Mercedes, Ferrari and Porsche dealerships to Sytner group and sold two Renault outlets to Parks of Hamilton.