Lookers acquires Colbornes for £33.6m UPDATED

Lookers has acquired Colbornes Group, the Guildford based Volkswagen Group business for £33.6m.

Colbornes, rated 53 in the Motor Trader Top 200, operates three Audi and two Volkswagen dealerships, one Skoda site and a VW commercial vehicle dealership, all in Surrey, as well as a Jaguar, Land Rover and a Bentley dealership in Barnet, North London.

Lookers, number five in the Motor Trader Top 200, has acquired the entire issued share capital of Colborne Garages from the vendors, Richard Neulaender, John Walsh, Guy Rowson and Nicholas Hinallas, for a cash consideration of £33.6m, of which £5m is deferred consideration. This has been satisfied using the group’s existing bank facilities.

The statutory accounts of Colborne for the year ended 30 December 2012 reported revenue of £188.9m and a profit before taxation of £2.2m, with gross assets of £53.1m and net assets of £6.6m.

“This acquisition is an important development in the group’s representation of the VW Group and Jaguar Land Rover brands in the South East,” said Lookers’ chief executive, Andy Bruce (pictured).

“Colborne is a well known, established and successful business for which we have tremendous respect and we are looking forward to welcoming its great team of people to Lookers.”

The move was welcomed by Panmure Gordon’s automotive analyst Mike Allen who said the acquisition would be earnings enhancing but noted the price was high.

“Lookers has acquired a well-established business in Colborne with an attractive brand mix, which should be 7-8% EPS enhancing from 2014 through to 2016 using fairly conservative assumptions,” he said.

“The headline price for the transaction does not look cheap including a fair amount of goodwill, but we think it is possible for Lookers to generate a post-tax ROCE of 15-20% on this business over time. With the company making good earnings progress against a backdrop of continued strong market conditions.”