Lookers has entered into a conditional agreement to sell its parts business to Automotive Alliance for £120 million.
The acquisition is expected to be completed before the end of October and includes Lookers’ parts distribution brands BTN Turbo, FPS and Apec Braking.
Alliance Automotive is part of Alliance Automotive Group, a European distributor of automotive and commercial vehicle parts to the automotive aftermarket.
Andy Bruce, Lookers chief executive, said the sale would allow the dealer group to focus on what it does best and he confirmed it will help fund more acquisitions for the group.
Neil Davis, the managing director of parts and a director of Lookers, will remain with the parts division under Alliance Automotive's ownership and will leave the Lookers board.
Bruce said: “The board believes this conditional agreement is in the best interest of shareholders.
“The offer from Alliance Automotive is an attractive one and will enable us to focus on what we do best; buying and selling cars, and adding value through acquisitions. We are already at advanced stages of negotiation on the acquisitions of two premium-branded car dealership businesses and hope to make further announcements on these in the coming weeks."
In the year to December 31, 2015, Lookers' parts division generated sales of £218.8m, underlying operating profit of £12.6m and gross assets of £155.7m.