Member Article

Audi introduced to Gateshead’s Vertu Motors following £12.8m acquisition

Gateshead-based car retailer Vertu Motors plc has acquired the entire share capital of SHG Holdings Limited which operates Audi, Volkswagen Passenger Cars and Volkswagen Commercials outlets in Hereford.

Consideration is approximately £12.8m and has been settled in cash from the Group’s existing resources. Further consideration of £1.5m is to be deferred for two years and will be payable under certain conditions.

The acquisition introduces Audi to the Group as a new franchise, strengthening Vertu’s strategic goal of growing the premium mix within the Group. Volkswagen Commercials is also introduced to the Group for the first time.

In addition to the three outlets representing Audi, Volkswagen passenger cars and Volkswagen commercials in Hereford, the business also includes two Volkswagen Group parts distribution operations in Gloucester and Hereford and a used car and aftersales facility in South Herefordshire. Volkswagen Group accounts for 20% of the UK car market; prior to this transaction, it accounted for 6% of the Group’s turnover and will account for 9% on a pro-forma basis after the transaction.

For the year ended 31 December 2014 South Hereford showed revenues of £77.5.m, EBITDA of £2.0m, profits before tax of £1.5m and net assets of £4.3m.

Robert Forrester, CEO of Vertu Motors said: “We are delighted to announce the introduction of Audi to the Group, which is a further step in the growth of our premium business, following the success of the Farnell acquisition and our subsequent profitable growth with Jaguar Land Rover. This is an example of the long term approach we take to investing in the future success of the Group.

“The acquisition will be earnings enhancing and South Hereford is a strong business with a great local heritage, a reputation for excellent customer service and a strong aftersales track record. Volkswagen Commercials will provide synergy opportunities with existing Vertu operations such as Bristol Street Versa, Taxi Centre and Group fleet operations.

“The acquisition will be earnings enhancing from next financial year, and increases the Group to 121 sales and aftersales outlets and will enable us to generate sustainable profitable growth to further enhance value for our shareholders. We are continuing to develop the Group by adding to existing franchise relationships and exploring new manufacturer partners. “

Andre Konsbruck, Director of Audi UK, added: “Audi is delighted to welcome Vertu as a part of our Audi network in the UK and welcome their investment.”

“Vertu is a business which, like ours, has enjoyed fantastic growth. We are confident that the approach taken by Robert and his Board of working in long term collaboration with manufacturer partners will ensure that the customers of South Hereford Audi will continue to enjoy an excellent and committed level of dedicated service.”

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