Vertu Motors has acquired Dobies, which has a Vauxhall and Seat site in Carlisle, for an estimated consideration of £4.3 million.
For the year ended December 31, 2012 the management accounts of the acquired businesses showed a turnover of £10.7m and an operating loss of £0.1m. The Proton and Peugeot franchises at the Dobies business have not been retained.
The deal will push Vertu up the AM100 table from ninth to seventh place, overtaking Mercedes-Benz Retail Group.
As part of the transaction, Vertu has acquired the long lease (for 123 years) for the multi-franchise dealership, which is located next to Junction 44 of the M6, to the north of Carlisle.
Robert Forrester, CEO of Vertu Motors, said: “This acquisition extends the group’s operations across the North of England and into Cumbria for the first time.
“These two outlets complement the group’s existing businesses in the North of England and in particular its Vauxhall operations in Newcastle, Hexham and Durham which are adjacent to the acquired territory. The additional Seatoutlet extends the group’s relationship with the Volkswagen Group.”
Forrester said Vertu is still actively looking for additional growth opportunities in the UK.
Vertu now has 13 Vauxhall outlets and four Seat outlets, taking the group to 93 overall.
The top 10 in the AM100 (using turnover from the 2011 statutory accounts)
1. Pendragon - £3.5bn
2. Sytner - £2.7bn
3. Arnold Clark - £2.3bn
4. Inchcape Retail - £2.0bn
5. Lookers - £1.9bn
6. Jardine - £1.2bn
7. Mercedes-Benz Retail - £1.2bn
8. Ford Retail - £1.1bn
9. Vertu Motors - £1.1bn
10. Greenhous - £781,000 (Source: AMi)
Mike Allen, Panmure Gordon executive director for equity research, support services, said: “Vertu has made another acquisition, which fits in well with its strong franchise in the North of England, enhancing its scale with Vauxhall while deepening its relationship with the Volkswagen Group.
“Due to the timing and required investment in integrating this business we estimate this will dilute 2013 estimate and 2014 estimate earnings per share (EPS) by 3% and 1% respectively but will enhance 2015 estimate by 2% under what we consider to be fairly conservative assumptions.
“We maintain our buy recommendation and target price of 55p, which implies strong upside from current levels.”