Vertu snaps up five Honda dealerships

Fast growing Vertu snapped up five motor dealerships in the East Midlands for £4.6m yesterday - and last night rumours were circulating there was another deal to follow.

Fast growing Vertu snapped up five motor dealerships in the East Midlands for £4.6m yesterday - and last night rumours were circulating there was another deal to follow.

Newcastle-based Vertu bought four Honda car dealerships and one Honda motorcycle dealership through the purchase of the entire share capital of Grantham Motor Company yesterday.

But speculation was rife the company, which raised £25m through a flotation on the Alternative Investment Market last November, was on the verge of making another acquisition - this time within the region.

According to motor industry sources, an acquisition of the Jennings Ford dealership on Coopies Lane, Morpeth, Northumberland, was "imminent".

The acquisition of the Honda dealerships in Grantham, Lincoln, Boston and Retford is Vertu's first introduction to the fast-growing Honda franchise.

Chief executive Robert Forrester said: "Geographically it makes a lot of sense for us. They are very high performing businesses at the top of their game, I think. Honda are currently at the forefront of green technology so as a franchise of the future I think it could be important.

"We currently have Ford, Vauxhall, Peugeot, Citroen and Renault which are French and American so Honda puts us into Japan. We think it's a good acquisition on a number of fronts."

The purchase will be funded through the group's existing debt facility with Barclays.

This acquisition brings the total number of dealerships operated by the group to 45. Vertu Motors, which was founded by former Reg Vardy executives last year, is already the 10th largest motor retailer in the UK by turnover.

Mr Forrester refused to comment on whether the company would buy the £8m dealership in Morpeth.

Last month Vertu bought three dealerships and a vehicle service centre in Derbyshire and Nottinghamshire after acquiring all of the shares in Blake Holdings, which employs 200 staff.

Forrester said a "six figure" investment was needed to increase the profitability of family-owned Blake, which last year generated pre-tax profits of just £40,000 on reported turnover of more than £59m.

In March this year it bought Bristol Street Group - one of Britain's best known car dealers - for £40m.

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