It’s been a busy week at Lookers. On Tuesday it was announced the Group had purchased Amersham Jaguar from Jardine Motors, and today Addison Motors Limited has been added to the expanding portfolio.
Better known as Benfield Motor Group the business was founded in Newcastle upon Tyne in 1957 and is one of the UK’s largest private motor retailing companies. Nigel McMinn, Lookers MD, was previously Benfields Chief Executive so knows the Group very well.
The Company has 1,600 employees working in 30 dealerships located across the North of England and Scotland. Benfield’s franchises include Audi, VW, VW Commercial Vehicles, Skoda, Ford, Toyota, Lexus, Hyundai, Kia, Renault, Dacia, Nissan and Honda. It offers sales, service, parts and bodyshop facilities for new and used cars and commercial vehicles and is a perfect complement for the Lookers brand.
Lookers Chief Executive, Andy Bruce, 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 which allows 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 acquisition – completed for £87.5m in cash – is being funded using new banking facilities made available to Lookers by Bank of Ireland, Barclays Bank, HSBC Bank, Lloyds Bank, Royal Bank of Scotland and Yorkshire Bank.
Analysts at stockbroker Zeus Capital issued a note this morning stating: "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 of c15% from this transaction over time.”
"We think it’s possible for management to generate £12.5m of PBT from this business on a normalised basis, and with modest synergies this target should be hit in the next 2-3 years in our view."
The company share price jumped to a high of £184.33 upon publication of the announcement.
By Tracey McBain