Lookers drives ahead with refinancing
LOOKERS, the car sales and parts distribution specialist with an operation in Sheffield, has sealed a £115m multi-bank refinancing deal, to help drive its grow and acquisitions strategy.
In a deal led by joint mandated lead arrangers Royal Bank of Scotland Corporate and Institutional Banking and Yorkshire Bank, the Manchester-based group has been supported by Barclays Corporate, two divisions of Handelsbanken, HSBC and Lloyds Bank Corporate Markets.
Lookers’ motor division consists of 119 franchise dealerships across the country representing 33 car marques across 71 sites, and it also owns a market leading independent parts division, which is based in Sheffield.
Despite the tough consumer market Lookers has continued to perform well. In the first six months of the year sales of new retail cars were 5.4% ahead of the UK market, used car volumes were up by 5% on a like-for-like basis and its parts division produced another record trading performance.
With the car parts business offering good growth potential, the new financing contains a flexible £30m ‘accordion’ component that Lookers can access if strategic acquisition opportunities arise in either the motor or parts divisions.
Finance director Robin Gregson, said: “Lookers are confident that we can continue to grow the business, deliver satisfactory financial results and use our balance sheet strength to pursue strategic growth opportunities as and when they arise.
“We benefit from working with a banking group that understands and supports our business and the new funding facilities provided by the RBS led syndicate will give us the financial flexibility to develop the company even further.”
Paul Thomas, relationship director, RBS CIB, said: “The syndicate is delighted to continue its relationship with Lookers and to provide a funding package that will enable this fantastic Manchester-based company to pursue its strategic ambitions.
“We devised a bespoke funding structure that is both flexible and efficient and look forward to working with the Lookers management team as it seeks out new opportunities.”
Paul Stanley, relationship director at Lloyds Bank Corporate Markets in Manchester, added: “Lookers is a real North West success story – it is a leading UK motor retailer and distributor with a fantastic heritage in motor sales.
“Lookers’ parts division is the jewel in its crown – it provides a stable, high value revenue stream that protects the wider business from fluctuations in the car retail market, which, whilst strong, is more acutely affected by the prevailing economic conditions. Having developed a market-leading position in that sector, the business is well placed to continue bucking the trend and recording strong growth.”
The banks were advised by Amanda Gray and Richard Oman at the Manchester office of law firm Addleshaw Goddard.
