Deals Review – September 2015

Friday 18th September 2015

In partnership with the Business Desk, several of our experts will comment on significant deals every month. For September our head of corporate, James Fawcett, looks at the motor trade sector, which has seen high levels of transactional activity in the past few months. Many of the leading dealer groups have been active in the acquisitions market this year as they look to expand across the UK.

One of the standout Yorkshire deals in August was the sale of GK Group to Perrys Group. GK Group, which has a £175m turnover, five Ford showrooms, one Kia showroom and an accident repair centre, was acquired for an undisclosed sum.

Here at Gordons, we advised the sellers of Armstrong Massey Land Rover in York to Inchcape Retail Group UK. The acquisition takes Inchcape’s portfolio of Land Rover dealerships to eight sites.

Earlier this month Lookers acquired Benfield Motor Group in a deal worth more than £87.5m and North East-based Vertu Motors, which bought Lancaster Jaguar in Bradford and Bury Land Rover in May, has recently announced that it is looking to acquire more businesses.

Whilst the motor trade sector was one of the earliest and hardest hit during the recession, it has recovered relatively quickly. We are now witnessing an increased amount of activity as competition for quality business between the large players in the market intensifies.

Manufacturers always have a key part to play within the sector and are hoping to reap the benefits of renewed market buoyancy. Jaguar Land Rover, for example, is in the process of changing its retail concept across the UK. The company is seeking a more integrated approach, moving from standalone Jaguar and Land Rover sites to having both brands operating side by side from the same location.

With money remaining relatively cheap, car sales continuing at high levels and manufacturers continuing to require high levels of capital investment in dealer sites, further consolidation is likely during the rest of this year.