Vertu Motors, the UK's sixth largest franchised dealer group, has bought online car parts retailer AceParts.
It announced this morning the £2.2 million deal to acquire the entire share capital of Who's Ace Holdings, which operates the established online vehicle parts business Aceparts.com from its headquarters in Sittingbourne, Kent.
Vertu said the AceParts business has built a successful presence in the non-franchised, on-line, automotive parts marketplace.
In its last financial year it achieved revenues of £4.8m, EBITDA of £0.6m and a gross margin of 19%, and the car dealer group expects it to be earnings enhancing in its first full year of ownership.
"AceParts has built considerable know-how in this market, where managing data relating to the fitment of parts to specific vehicles is a critical component of a successful business model.
"There is a significant opportunity to apply AceParts' proven ability to efficiently manage fitment data and establish the sale of genuine, franchised parts online, which is a substantial market segment.
"Bringing together this data capability with multi-franchise parts supply will provide the opportunity to accelerate growth in the parts sales channel to both retail end users and independent garages," said Vertu's statement to the London Stock Exchange.
AceParts was founded by Alan Friedman and Ben Friedman, both of whom will be joining Vertu Motors along with 21 colleagues.
Total consideration is estimated at £2.2m which includes an earn-out over a five year period, which would include goodwill of £1m. The initial payment of £1.8m has been settled in cash from the Group's existing resources.
Robert Forrester, Vertu Motors' chief executive, said: "This is an exciting development in a growing space, which is parallel to our core motor retail business and has synergies with it.
"We expect AceParts to generate an earnings stream with higher gross and net margins than those in motor retail, and we believe that the future growth prospects for this new business are substantial.
"By working with the niche skills of the AceParts team and the group's franchise partners, we believe that we can build a significant business which will meet the needs of a wide range of customers seeking specific vehicle parts."