The £60m paid for the group was split by approximately £28 million for the entire issued share capital of Dutton Forshaw and £32 million of debt. Lookers expects the deal to be earnings enhancing after its first full year of ownership.
The deal is expected to be completed by October 26. Maurice Rourke, managing director at Dutton Forshaw will stay with the company until he retires at the end of the year.
AM asked Lloyds TSB if they invited offers for Dutton Forshaw, but it did not comment.
Lookers said it expected to retain the vast majority of employees of Dutton Forshaw.
Ken Surgenor, chief executive of Lookers, said: “This acquisition provides Lookers with an ideal opportunity to broaden our geographical spread and to deepen our relationships with our manufacturer partners, including our newer partners Ford and Mercedes-Benz.
“We are delighted to have acquired such high quality dealerships which we expect will be earnings enhancing in our first full year of ownership and we remain focused on growing Lookers organically and by acquisition.”
Dutton Forshaw generated sales of £431m in the financial year to December 31, 2006, reported an operating profit of £3 million and had gross assets of £129m.
David Oldfield, managing director, Lloyds TSB Asset Finance Division, explained the reasons for exiting the motor trade: "While we have seen benefits from the strong partnership between Dutton Forshaw and other parts of our Asset Finance Division businesses, the car supply market has changed and in a consolidating industry we have concluded that a disposal to the right party is in the best interests of shareholders, staff and customers." Dutton Forshaw has a network of 31 outlets operating under the Dutton Forshaw and Dovercourt brands. The acquisition will increase the Lookers’ number of Ford outlets from one to eight, Mercedes-Benz outlets from four to eight and VW outlets from five to nine. Other outlets acquired include Chevrolet, Chrysler Jeep and Dodge, Citroen, Honda, Hyundai, Land Rover, Peugeot and Skoda.
In particular, the acquisition will strengthen Lookers’ presence in the south east and north west of England, and provide a foothold in south Wales.