Car dealership group acquired in £55m deal
A WEST Midlands car retail group is being acquired by a rival in a deal worth more than £55m.
Warwick Holdings, trading as Drayton Group, is registered in Birmingham but has a network of seven branches across the region.
The group, which earlier this year was recognised as one the of the UK’s fastest profit-making businesses, is best known for selling the Mercedes-Benz brand.
Founded in 1915, the group has a turnover of £276m and is a four-time winner of Mercedes-Benz Retailer of the Year. The company operates from dealerships in Stoke on Trent, Stafford, Shrewsbury, Wolverhampton, Walsall, Stourbridge and Worcester.
It has been acquired by Manchester-based car dealer group Lookers in a deal which values the business at £55.4m.
The cash deal 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.
It is the second multi-million-pound deal involving Mercedes-Benz dealerships to be completed in the West Midlands this year.
In May, Hong Kong-based Lei Shing Hong, which represents the Mercedes marque in China, South Korea and Cambodia, purchased nine dealerships to gain its first foothold in the UK.
The portfolio of businesses included four in the West Midlands with the remaining five based in the North West.
Lookers said the acquisition would strengthen its partnership with Mercedes Benz and Smart, where the new combined business will have an annual turnover of more than £600m and will expand the group’s presence in the West Midlands market.
For the year ended December 31, 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 December 31, 2017.
Squire Patton Boggs in Birmingham acted for the seller on the deal.
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.”
