Group 1 Automotive has agreed a £346 million deal to accumulate Inchcape’s UK dealerships, nearly doubling the dimensions of the AM100 group.
The addition of Inchcape’s 54 websites takes Group 1 Automotive UK’s dealership portfolio as much as 109 shops, and its complete annual revenues of greater than £4 billion will imply it overtakes Marshall Motor Group to enter the highest 5 of the AM100.
After US-based Group 1 purchased its first UK companies in 2007 on the south of England, it has steadily expanded northwards into East Anglia and the Dwelling Counties, nonetheless this acquisition expands its territory into Wales, the Midlands and the North West of England.
And its chief govt Daryl Kenningham desires to drive the mixed operations into their subsequent part of development.
Inchcape revealed in January that it had put its UK vendor group, Inchcape Retail, underneath a strategic overview because it continued to refocus on increasing its international car distribution operations, reasonably than retailing.
The vendor group has a workforce of greater than 2,500 individuals, who had been ready to listen to their destiny.
Asserting the sale, Inchcape chief govt Duncan Tait mentioned the disposal of the dealerships “represents a big step” for his group.
“With our energetic worldwide growth into larger worth distribution actions, the strategic significance of the UK retail operations has turn into restricted. The board has due to this fact concluded it’s the proper time for a brand new proprietor to take this enterprise ahead.
“This transaction aligns with our strategic priorities, simplifies our enterprise and represents a compelling alternative to ship significant returns to our shareholders. We consider it should improve the group’s general worth proposition and allows us to drive development and long-term worth creation for all stakeholders as we additional develop our differentiated distribution platform.”
Distribution will now account for 99% of Inchcape’s international income and working revenue.
He mentioned nonetheless that the Inchcape Retail is a high-quality enterprise, with an skilled and high-performing administration staff, and it had been an necessary a part of Inchcape’s development over time.
“In Group 1, our UK Retail operations could have a brand new proprietor with a powerful observe document of business development, current presence and retail expertise within the UK market and a powerful stability sheet. I’m grateful to our UK colleagues for constructing such a high-quality automotive retail community and I’m assured that the enterprise will proceed to excel underneath Group 1’s possession.”
Group 1’s president and chief govt Daryl Kenningham (pictured) mentioned he was “extraordinarily happy to have this chance to develop” within the UK vendor market.
Inchcape’s UK dealership portfolio consists of Audi, BMW/Mini, Jaguar Land Rover, Lexus, Mercedes-Benz, Sensible, Porsche, Toyota, Volkswagen and Volkswagen Business Automobiles. On an mixture foundation, these dealerships promote greater than 63,500 new and used autos, and 24,000 company items, yearly.
“Inchcape’s model combine is excellent. These new shops complement our geographic footprint within the East and South East of England and allow us to develop into new markets within the Central and North West areas of England and Wales. Inchcape’s distinctive status has been constructed over 50 years within the retail enterprise. We look ahead to welcoming our new staff mates to the Group 1 household.”
Kenningham added: “We look ahead to constructing on Inchcape’s robust business relationships and leveraging our experience to assist our mixed operations of their subsequent part of development.”
The £346m ($439m) all-cash transaction consists of £220m of property belongings. Group 1 chief monetary officer Daniel McHenry, who was finance director of its UK operation from 2007 till taking his present international function in 2020, mentioned: “Whereas this transaction supplies a metamorphosis in scale for our firm within the UK, our US credit score facility pro-forma leverage ratio can be roughly 2.2x after considering the financing of this transaction with debt and money available, and liquidity stays comfortably inside our targets.
“This provides us the pliability to proceed shareholder-focused capital allocation, which incorporates accretive acquisitions, share repurchases, dividends, and return-driven capital expenditures.”
It’s Group 1’s greatest acquisition within the UK since it took over nine-dealership group Robinsons in East Anglia throughout 2021.
It is not the one deal Group 1 has completed with Inchcape. In 2013 it acquired Inchcape’s Ford dealership division.
George Ashford, who heads the UK operation of Inchcape, thanked colleagues for his or her contribution to creating the vendor group successful. He added: “I am assured we’ll proceed to excel as a part of Group 1, who’re nicely positioned to drive additional development.”
