Marshall Motor Holdings has completed the £22.3 million acquisition of eight Volkswagen Group franchised car dealerships from Jardine Motors.
As exclusively reported by AM last week, the AM100 retail group has completed a deal to acquire six Volkswagen passenger car franchises in Aylesbury, Harlow, Letchworth, Loughton, Milton Keynes and St Albans together with a Volkswagen commercial vehicle franchise and body shop in Loughton and a Skoda passenger car franchise in Milton Keynes.
The £22.3m deal includes £13m of inventory, a statement issued via the London Stock Exchange revealed this morning (December 18).
Marshall reported that it expects the acquisitions to be “earnings dilutive” in 2020 and 2021 as aggregate revenue for the Jardine businesses amounted to £196.1m in 2017 and £212.8m in 2018 alongside losses before tax of £3.3m and £2.8m, respectively.
Commenting on the acquisitions, Marshall chief executive Daksh Gupta said: “I am delighted that we have further strengthened our already excellent relationship with Volkswagen Group UK with this acquisition.
“While the acquired businesses are currently loss making, we are confident in their future potential. The businesses are in excellent locations that are contiguous to our existing Volkswagen and Skoda franchises and each site is fully compliant with the latest brand requirements.
“It is an exciting time to extend our partnership with Volkswagen Group UK as the impact of its significant investment in electrification and mobility services will be demonstrated.
“We are extremely proud to represent Volkswagen Group and wish to thank the UK management teams of each brand for their support for this acquisition.”
Marshall said that all of dealership businesses acquired from Jardine are fully compliant with the latest brand corporate identity requirements.
Around 400 employees will transfer to the group as part of the acquisition.
As previously reported by AM, Jardine will retain its Volkswagen authorised repairer and approved used car operation in Towcester, which is excluded from the transaction, however it will be relinquishing the franchise as part of the acquisition.
An Audi approved used business in Aylesbury – which is adjacent to the Volkswagen dealership acquired by Marshall – is also being retained by Jardine.
The statement said: “Completion of Aylesbury Volkswagen will be deferred pending completion of the legal process to sub-divide the site.
“It is expected that this process and the transfer of the Aylesbury Volkswagen business will be completed in 2020.”
The total consideration agreed for the fixed assets and goodwill of the Jardine VW Group businesses will be up to £9.3m, including deferred consideration in respect of the Aylesbury business, funded from Marshall’s existing resources.
The fixed assets include £4.3m in respect of freehold/long leasehold properties in Letchworth and St Albans and the goodwill is £3.6m.
In addition, excluding Aylesbury, the businesses held £13m of inventory of motor vehicles, parts and other stock at completion which will be primarily funded via the Group’s existing stock funding facilities.
Growth with VW
Marshall said that the expansion of its relationship with the Volkswagen Group has significantly strengthened a partnership started back in 2012, adding that “establishing further scale with our brand partners is of paramount importance”.
The group now represents the Volkswagen Group in 53 operations across the UK making the Group Volkswagen Group UK’s largest partner by number of locations.
Marshall is now the second largest partner in the UK for Volkswagen passenger cars with 14 retail centres.
It is also now the largest partner in the UK for Volkswagen commercial vehicles with six retail centres and the largest Skoda franchisee by number of sites, with a total of 12 locations following the acquisition of six Skoda franchises from Sandicliffe and Progress Group earlier this year.
Alex Smith, managing director of Volkswagen Group UK, said: “We are pleased to have extended our relationship with Marshall, a trusted partner of Volkswagen Group here in the UK, demonstrated by the fact that it is now our largest partner in the UK by number of locations.
“Marshall has demonstrated its commercial and customer focus capabilities over the long term and we are confident in its ability to maximise the operating performances of these businesses.
“The Volkswagen Group is investing significantly in its future product portfolio and having strong retail partners such as Marshall is key to delivering these exciting new products to our customers.”
As well as the six Skoda franchises acquired earlier this year, Marshall has expanded its retail portfolio with Honda, the London Electric Vehicle Company (LEVC) and begun preparations to grow its Volvo footprint in recent months.
In September the group acquired two Honda businesses in Reading and Newbury from Jardine, reinforcing its position as the second largest Honda partner in the UK with eight locations.
A new Volkswagen Commercial Vehicles site was opened in October, occupying an existing site vacated following the relocation of the group’s Jaguar and Land Rover (JLR) businesses to a new ‘Dual Arch’ site in Lincoln.
Marshall has also begun a new partnership with LEVC, the manufacturer of electric London taxis owned by Geely Automotive Holdings.
The Group represents the LEVC brand in Nottingham, sharing facilities with the Group’s Volvo franchise.
In addition, the Group is in advanced negotiations to acquire the Volvo franchise in Derby – a deal expected to complete before the end of the year.
Gupta said that he was “delighted” that the group had been able to extend its partnership with both the Honda and Volvo brands and was pleased to establish a new relationship with LEVC.
He added: “I would like to extend a warm welcome to all colleagues of our recently acquired businesses to Marshall and look forward to working with them over the coming years.”