Lookers in £55.4m acquisition deal
MANCHESTER-based car dealer group Lookers is to acquire Warwick Holdings, trading as Drayton Group, for £55.4m in cash.
The acquisition is being funded from existing bank facilities through a conditional contract.
The condition is that it successfully concludes the £120m sale of its parts division to Alliance Automotive UK, which was announced last week and is expected to complete by the end of October.
Founded in 1915, £276m turnover Drayton Group is a luxury car retailer offering sales, parts, service and repair facilities for new and used cars and is a four-time winner of Mercedes-Benz Retailer of the Year. The company operates from seven locations in Stoke on Trent, Stafford, Shrewsbury, Wolverhampton, Walsall, Stourbridge and Worcester.
Lookers said the acquisition will increase its partnership with Mercedes Benz and Smart, where the new combined business will have an annual turnover of more than £600m and will provide further for the group in the Midlands.
For the year ended 31 December 2015, Drayton reported a pre-tax profit of £5.2m and had gross assets of £84.2m and net assets of £22m.
Lookers said the acquisition is expected to be earnings enhancing for the year ending 31 December 2017.
Andy Bruce, chief executive of Lookers, said: “We are looking to accelerate growth and today’s announcement shows we are putting the proceeds from the proposed disposal of the Parts Division to work as quickly as possible.
“We look forward to welcoming the Drayton team to the Lookers Group as it will enable us to increase our growth by adding value through excellent execution and targeted acquisitions. This acquisition will also help to build the Company’s presence in the Midlands.
“I have been very impressed with the quality of Drayton Group’s business, outstanding customer service and commitment to employee satisfaction. These qualities complement Lookers culture and will allow us to advance our strategy of having the right brands, in the right locations in order to take advantage of further growth opportunities.”
Lookers was advised by Simon Masters and Nicola Brookes of Eversheds. Squire Patton Boggs in Birmingham and UHY Hacker Young’s Manchester office advised Warwick Holdings/Drayton Motor on the transaction.
