Vertu Motors has added two Toyota dealerships to its network after completing the acquisition of dealer group Farmer & Carlisle.
The Car Dealer Top 100 firm has paid £9.2m for the Midlands-based company which runs franchise dealerships in Loughborough and Leicester.
The move was confirmed this morning in a statement to the London Stock Exchange.
The £9.2m deal comprises of two freehold properties valued at £6m and goodwill of £2.35m with £0.9m of net cash included within the net assets acquired.
Farmer & Carlisle returned a pre-tax profit of £0.6m from a turnover of £29.2m in the year ending December 31, 2020.
The takeover will see its two sites rebranded as Vertu, taking the group to three Toyota dealerships across the East Midlands.
The new business will be supported by the website, vertumotors.com.
As a result of the acquisition, Vertu now represents 13 manufacturer partners across 39 sales outlets in the East Midlands.
The region represents the most significant area operated by the group in terms of sales outlets.
Robert Forrester, CEO of Vertu Motors said: ‘We are delighted to announce the group’s expansion with the much sought-after Toyota franchise.
‘The addition of more Toyota sales outlets to our portfolio has long been a strategic objective of the group since we envisage the brand gaining market share in the medium-term and being well positioned to take advantage of opportunities as the wider automotive sector evolves.’
Industry experts Zeus Capital have described Toyota as a ‘growth brand’ and believe the acquisition is good news for Vertu.
Although Zeus has not changed its earning forecasts for Vertu, that could change going forward.
A spokesman said: ‘We view Toyota as a winning brand committed to growth in the UK market over the long term.
‘We have adjusted our net cash forecasts to account for the consideration this year, but will leave our 2023E earnings forecasts unchanged for now and will review this in full detail when the company announces a year end round up in early March.
‘We remain confident that the risk/reward profile for Vertu remains firmly on the positive side, and re-iterate our intrinsic value estimate of 85.9p per share, which does not take any account of this latest transaction.’