Motor dealership Vertu has expanded its estate through the £4.7m acquisition of three Volkswagen dealerships in a move aimed at developing its presence in the East Midlands.
The Gateshead-based firm, which trades as Bristol Street Motors, has bought up the entire share capital of Brookside, which operates three well established Volkswagen dealerships, two in Nottingham and one in Mansfield.
The acquisition comes less than two weeks after the rapidly-growing firm extended its Scottish presence with the acquisition of two Hyundai dealerships, making the company the motor giant’s largest UK partner, and July’s acquisition of the Boston and Lincoln Volkswagen dealerships.
The assets acquired include two leasehold properties to the east and west of Edinburgh. The consideration, which includes £300,000 for goodwill, is estimated at £700,000 and will be settled in cash from Vertu’s existing resources.
Assets included in the deal include one freehold and two leasehold properties and the total consideration, which includes £1.6m of goodwill, is estimated at £4.7m which will be settled in cash from the Vertu’s existing resources.
Accounts for Brookside for the year ended December 2012 show the firm has revenues of £35.7m and EBITDA of £400,000, and the board said it expects to see earnings from the acquisition in its first full year of ownership.
Announcing the deal, chief executive Robert Forrester said there were significant opportunities for marketing and management synergies across Vertu Volkswagen and that the three dealerships are in attractive motor retail locations, close to other Vertu businesses.
Forrester said: “We are delighted to announce the next step in our growth with Volkswagen and the Volkswagen Group.
“Volkswagen provides customers with a strong, high-quality product offering at attractive prices, and the Vertu Volkswagen name will now gain real critical mass as we develop its presence in the East Midlands.
“Nottingham and Mansfield are important centres where Vertu already represents several manufacturer partners including Citroen, Hyundai, Honda and Suzuki. Adding Volkswagen to this list will further strengthen our business.
“We are continuing to develop the group by adding to existing franchise relationships and exploring new manufacturer partners. This acquisition increases the Group to 104 sales and aftersales outlets and will enable us to generate further profitable growth for our shareholders.”
In October the company said its “buy and build strategy” executed over seven years has led to record half-year results at motor dealers Vertu.
Sales rose 33.3% to £837.2m, pre-tax profits lifted by 69% to £8.6m for the six months ended August 2013 and the firm also saw a 28% like-for-like new retail volume increase.