8:01 am, May 26, 2016
MARSHALL Motor Holdings plc, one of the UK’s leading automotive retail and leasing groups, has bought Ridgeway Garages in a £106.9m deal.
The acquisition sees Marshall move from being the 10th to the seventh largest motor dealer group in the UK and has been hailed by boss Daksh Gupta as being ‘truly transformational’ for his company.
Ridgeway, the multi-franchise dealer group which operates across swathes of southern England, represents 12 brands across 30 franchised dealerships. Its manufacturer partners include Audi, BMW, Jaguar, Land Rover, Maserati, Mercedes-Benz, Mini and Skoda.
The company’s consolidated revenues for the 2015 financial year were £722.6 million, adjusted EBITDA was £20.2 million and year-end shareholders’ funds were £55.4 million including £15.2 million of net debt.
The deal makes sense for Marshall. There is a strong OEM overlap creating further scale with existing brand partners, all of whom are said to have been supportive of the acquisition.
It adds four Mercedes-Benz commercials operations; and it extends Marshall’s geographic footprint from 19 to 25 counties in England.
Operationally, Ridgeway is a group Daksh Gupta knows well, and the acquisition provides scaled platforms for future growth.
The deal will benefit Marshall in many ways, with company bosses confident it will prove to be significantly earnings-enhancing.
It also beefs up Marshall’s freehold property portfolio, given the fact that Ridgeway’s 13 freehold properties comprised £53.9m of land and buildings as at December 31, 2015.
Daksh Gupta
Gupta, Marshall Motor Holdings group’s chief executive, described the deal as ‘truly transformational’ for his company and added: ‘This is a significant strategic and value-enhancing acquisition for MMH.
‘The acquisition, which is in line with our stated strategy to grow scale with existing brand partners, further builds on our acquisition last year of SG Smith by cementing our geographic footprint into the affluent southern home counties of England, such as Wiltshire and Dorset.
‘We have funded this acquisition from our existing balance sheet capabilities. The board expects the acquisition of Ridgeway to deliver significant earnings enhancement and returns materially greater than our weighted average cost of capital.
‘Ridgeway is a company I have been associated with since 2007. David Newman and his team have built an excellent business with fantastic senior management, great staff, strong performance and a similar culture to ours.
‘I very much look forward to welcoming our new Ridgeway colleagues to the group and working closely with them again into the future. Finally, I wish to thank all of the OEMs who Ridgeway represent for their support of the acquisition.’
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