Led by HR Owen divisional director Jonathan Smith and finance director David Ho, the business has been renamed Citygate Automotive Limited.
The deal was instigated in December last year when HR Owen sold Volkswagen car and van business to Citygate Automotive for £2.4m. However, at that point the sale of five VW car franchises and one van franchise was still conditional upon the assignment of leases.
The consideration for the business will consist of £1.0m goodwill and approximately £1.4m of fixed assets together with the net book value of stocks at completion.
Citygate managing director Jonathan Smith says: “Our success is built on the very highest levels of service and we aim to continue providing that.
“At Citygate we have strived to create the culture of a local, family-run business and many of our customers and staff have been with us for many years.
“The opportunity that a market area the size of Citygate presents with the Volkswagen brand is immense and we are looking forward to further developing this”.
Citygate employs 330 staff across five Volkswagen retail operations in Ruislip, Colindale, Watford, Chalfont and High Wycombe and one Volkswagen van centre in Colindale.
The combined operation sells in excess of 7,000 new and used vehicles each year and generates more than £80m in turnover.
The agreement to allow the MBO follows the sale for £3.4m in December of HR Owen’s six Ford PAG dealerships in East Anglia to Lookers.
Nick Lancaster, HR Owen chief executive, says: “I have many regrets about not continuing with Volkswagen because I believe it is a great brand and will do well.
“Retaining VW did not, though, fit with our business plan, and the MBO and sale to Lookers has enabled us to virtually eliminate our debts.”