Vertu Motors Plc Acquires Helston Garages Group Limited
Vertu Motors plc, a leading UK automotive retail Group, announced that further to the announcement on 8 December 2022 and having now received FCA approval, it has completed the acquisition of Helston Garages Group Limited (‘Helston’). Helston is a predominantly premium manufacturer automotive retail group based in the South West of England (the ‘Acquisition’). Vertu has acquired 28 franchised sales outlets, adding significant scale and geographic coverage to the Group’s existing footprint of 160 franchised outlets. Consideration of £117m, net of anticipated cash and cash equivalents of £65m, has been financed through a combination of re-negotiated and new debt facilities.
The acquisition of Helston, which is anticipated to be double digit EPS enhancing in the year to 28 February 2024, is a continuation of the long-term strategy of the Group to drive scale, expand into new and attractive regions and introduce new Manufacturer Partners. Helston radically enhances the Group’s scale and reach into the South West of England. Following the acquisition, Vertu will have 32 sales outlets in the region, up from the current four. The Group will also welcome Ferrari and Volvo as new Manufacturer partners.
Robert Forrester, Chief Executive Officer of Vertu Motors, said:
“We are delighted that Vertu Motors has completed its acquisition of Helston and 28 sales outlets, further evidence of the execution of our long-term strategy to build scale, geographic coverage and deepen our relationships with our key automotive Manufacturers. I have spent much of the last week in the business, have met many highly talented people and visited the impressive and well invested property estate. The integration process will commence immediately and be largely completed by March 2023.”
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Acquisition of Helston Garages Group Limited to deliver double digit EPS accretion, increase scale and deepen OEM relationships
New debt facilities agreed
Vertu Motors plc, a leading UK automotive retail Group, today announces it has agreed to acquire, subject to FCA regulatory approval, Helston Garages Group Limited (‘Helston’), a predominantly premium manufacturer automotive retail group based in the South West of England (the ‘Acquisition’). Vertu has acquired 28 franchised sales outlets, adding significant scale and geographic coverage to the Group’s existing footprint of 160 franchised outlets. Total consideration of £117m, net of cash and cash equivalents of £65m, has been financed through a combination of renegotiated and new debt facilities.
Transaction highlights
• Acquisition of Helston for an enterprise value of £120.1m, represents 6.8x the EBITDA1 of the acquired dealerships
• Clear strategic logic with transformation of the Group’s footprint in the South West of England with 28 additional franchised sales outlets
• Strengthening of premium OEM relationships, with Vertu welcoming Ferrari and Volvo to the Group
• Acquisition expected to be double digit EPS accretive for financial year to 28 February 2024; accretive to Free Cash Flow (FCF) from FY25; and is expected to deliver return on investment ahead of group WACC2 and internal return hurdle rates
• Renegotiated and new debt facilities agreed bringing total available facilities to £302m with net debt3 as at 28 February 2023 expected to be £100-110m, less than 1.4x adjusted pro forma EBITDA
• Helston has a freehold rich and well invested property portfolio
• In the year ended 31 December 2021, the acquired dealerships generated revenues of £498.9m, an underlying EBITDA and underlying pre-tax profit of £20.6m and £17.9m
respectively
• Completion of the transaction will be subject to applicable FCA regulatory approvals and is anticipated within the next five weeks.
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