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Vertu Motors acquires three Volkswagen dealerships

Vertu Motors has acquired the entire share capital of dealer group Brookside which operates three Volkswagen dealerships, two in Nottingham and one in Mansfield for £4.7 million.

The assets acquired include one freehold and two leasehold properties.

Total consideration, which includes £1.6m of goodwill, will be settled in cash from the group’s existing resources.

For the year ended December 31, 2012 the management accounts of Brookside showed a turnover of £35.7m and EBITDA of £0.4m. Vertu expects the acquisition to be earnings enhancing in its first full year of ownership.

The Volkswagen sites further develop Vertu’s representation with the brand following its acquisition of Boston and Lincoln Volkswagen dealerships in July this year.

Robert Forrester, Vertu Motors chief executive, said: “Volkswagen provides customers with a strong, high quality product offering at attractive prices, and the Vertu Volkswagen name will now gain real critical mass as we develop its presence in the East Midlands.

“Nottingham and Mansfield are important centres where Vertu already represents several manufacturer partners including Citroen, Hyundai, Honda and Suzuki. Adding Volkswagen to this list will further strengthen our business.”

Forrester said the group would continue to develop the group by adding to existing franchise relationships and exploring new manufacturer partners.

This acquisition increases the group to 104 sales and aftersales outlets.

Mike Allen, Panmure Gordon executive director of equity research and support services, said: "Post this acquisition Vertu's balance sheet remains fairly cash rich and the company has also indicated that its pipeline of acquisition opportunities remains strong.

"We believe the businesses are reasonably well stocked, but have factored in an additional £1m of capital expenditure in 2014E to ensure the dealerships comply with manufacturer standards."



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Comments

  • Shareholder - 02/12/2013 18:37

    £4.7 million for £0.4 million profit (EBIDTA) sounds quite high to me without considerable synergies + freehold land. Panmure suggest a need for £1 million more capital spending too. I have no doubts about the growth strategy, I just hope as a shareholder this is a good long term profit enhancing acquisition Mr Forrester. Vertu has a good cash reserve to use, but it needs to do so wisely of course. I do have faith and VW is a good brand.

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