LOOKERS has added Benfield Motor Group to its expanding portfolio for £87.5m in cash, it was announced today.
It comes hot on the heels of the Manchester-based business buying Amersham Jaguar from Jardine Motors Group.
Also known as Addison Motors Limited, Benfield is one of the largest private motor retailing companies in the UK. Lookers managing director Nigel McMinn was previously the chief executive of Benfield.
Benfield has 1,600 employees in 30 dealerships across the north of England and Scotland, with its franchises including Audi, VW, VW Commercial Vehicles, Skoda, Ford, Toyota, Lexus, Hyundai, Kia, Renault, Dacia, Nissan and Honda. It also offers sales, service, parts and bodyshop facilities for new and used cars as well as commercial vehicles, and is seen as a perfect complement for the Lookers brand.
Andy Bruce, chief executive of Lookers, said: ‘We are delighted to have acquired this respected and long-established family business. A key attraction for us is the cultural fit. Both Lookers and Benfield share an approach which puts employees and customers at the heart of our business and this acquisition will ensure that continues.
‘We are committed to preserving and nurturing this culture as well as putting in place new initiatives allowing Benfield to benefit from our larger scale and leverage the investments we have made. The acquisition also strengthens our relationship with a number of our key manufacturer partners and gives us a truly national footprint by adding to our presence in the north-east of the UK.
‘I would like to take this opportunity to welcome all of the employees of Benfield to the wider Lookers family.’
The company’s share price jumped to a high of £184.33 after the announcement was made.
The acquisition was funded via new banking facilities from the Bank of Ireland, Barclays, HSBC, Lloyds, the Royal Bank of Scotland and Yorkshire Bank.
A statement from analysts at stockbroker Zeus Capital said: ‘We believe this is a good transaction as it provides more scale to the group with many of its brand partners. Management know this business extremely well, and we can see how Lookers can generate a ROCE [return on capital employed] of circa 15 per cent from this transaction over time.
‘We think it’s possible for management to generate £12.5m of PBT [profit before tax] from this business on a normalised basis, and with modest synergies this target should be hit in the next two to three years in our view.’
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