Marshall Motor Holdings has acquired the entire issued share capital of Motorline Holdings Limited (including all of its subsidiaries), for a cash consideration of £64.5m funded from the Group’s existing cash resources.
The net assets on acquisition include c.£20m of cash and c.£10m of debt.
The Group has also separately acquired a related freehold property for £2.9m and has the option to acquire two additional strategic freehold properties for £24.9m.
Daksh Gupta, CEO at Marshall, told Motor Trader: “This is a massive acquisition. Our last big acquisition was in 2016 with Ridgeway. So, we have been part of the biggest and the second biggest transactions in the last 15 years. But, fantastically, we’re still debt free. We still have cash. That is an amazing position to be in. And we needed to deploy that cash, but not just for the sake of it, but because we were going to spend it on something that we wanted and this acquisition is a great fit for our business.
“What we have is two powerhouse businesses coming together to create a great, super powerhouse.”
Motorline is a leading multi-franchise dealer group headquartered in Canterbury and operating across Kent, West Sussex, Surrey, Berkshire, Bristol, South Wales and the West Midlands. It represents ten brands through 48 operating franchises including Toyota, Lexus, Hyundai, Volkswagen, Audi, ŠKODA, Nissan, Peugeot, and Maserati. In addition, it operates four Volkswagen Group Trade Parts Specialist (TPS) businesses and five used car centres.
Motorline’s consolidated revenues for the year ending 31 December 2020 were £695.2m with profit before tax of £6.1m (which included a one-off profit on the disposal of freehold property and other one-off items of in aggregate c£4.0m). Motorline’s consolidated shareholder funds at completion are c.£30m, including c.£20m of cash and c.£10m of debt.
Marshall expects annual revenues to exceed £3bn, with the acquisition giving it scaled entry to the Toyota and Lexus brands, as well as Hyundai.
Motorline is the second largest retail partner for Toyota and Lexus in the UK with 19 franchises; Toyota/Lexus is the largest vehicle manufacturer globally with a passenger car market share of approximately 7.2% in the UK. It is the joint second largest Hyundai retail partner in the UK with seven franchises. Hyundai is the third largest vehicle manufacturer globally with a UK market share of approximately 4.0%.
The move further strengthens the Group’s position in terms of scale and depth of relationship with Volkswagen Group through new locations with the Volkswagen, Audi and ŠKODA brands in attractive territories, together with additional Volkswagen Group TPS locations.
It also adds seven further Nissan franchises, making the Group the fourth largest Nissan retail partner in the UK with ten franchises. It adds four further Peugeot franchises, making the Group the joint second largest Peugeot retail partner in the UK with seven franchises.
The new brands increases the Group’s brand coverage to 85.4%, enabling synergies for used vehicle remarketing and fleet sales. It extends the Group’s geographic footprint into a further eight counties with the Group now having representation in 37 counties in England and Wales, further strengthening the Group’s used car proposition.
Gupta said that the Group’s strategy has always been to grow scale with key brand partners and to extend its geographic footprint, which this deal does.
He said: “We see scale as an enabler to invest in new technologies and expand our consumer proposition both digitally and physically.
“Of course, if you bring two big businesses together you’re going to have a lot more stock. In normal times, we think both businesses will have a combined stock of around 22,000 new and used cars so. That’s really powerful.
Gupta feels that to get in with Toyota and Lexus with 19 franchises is a “big coup”, and the Group is “absolutely delighted” with them and grateful for their support.
He said: “The acquisition allows use to come straight in as Toyota’s second biggest partner in the UK, which I think is a huge vote of confidence and trust in us as Marshall and we won’t let them down.
“With two businesses coming together, the geographic footprint we now have as a business is huge.”
On the option to acquire two further properties, Gupta said that it is absolutely a part of the plan.
He said: “We would like to take advantage of those properties, and the key reason we have not right now is because they’re not being built yet. One of them for example is Bristol Toyota and Lexus, which is currently a building site. But when construction is finished, we absolutely want to buy those two key strategic locations.”
Marshall will retain the 1,500 Motorline staff, and will re-brand the entire network as Marshall.