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£21.9m acquisition sees Gateshead’s Vertu add Mercedes to its franchise

Gateshead-based car retailer Vertu Motors has introduced Mercedes-Benz to its franchise portfolio, following the acquisition of Berkshire-based dealership Sigma Holdings Limited for £21.9m.

With a network of 126 sales and aftersales outlets across the UK, Vertu’s latest purchase marks further progress in its strategic goal of growing the premium mix within the group.

Also acquiring Greenoaks (Maidenhead) Limited, a subsidiary of Sigma, Vertu has snapped up a retailer which has represented Mercedes-Benz for over 30 years.

Greenoaks operates the Mercedes-Benz outlets in Reading, Ascot and Slough, with the Reading and Ascot outlets also representing the smart franchise and Ascot being an AMG performance centre.

The total cash consideration of £21.9m includes initial consideration of approximately £18.4m and has been settled from the group’s existing cash resources and borrowing facilities. A further £3.5m is deferred for twelve months, whilst the transaction includes goodwill of £13m.

For the year ended 31 December 2015, Greenoaks achieved consolidated revenues of £88m and had net assets of £6.2m as at 31 December 2015. The Vertu board reportedly expects this acquisition to be earnings enhancing in its first full year of ownership.

Robert Forrester, CEO of Vertu Motors said: “We are delighted to announce the introduction of Mercedes-Benz to the Group, which is a significant further step in the growth of our premium business.

“The Greenoaks business has operated in the Thames Valley for over 30 years, is well established in this attractive market area and brings three high quality freehold properties which will further strengthen the Group’s asset base.”

“The acquisition will be earnings enhancing from our new financial year and will also provide synergy opportunities with the Group’s fleet and internet-based sales operations.”

Mercedes-Benz UK, commented: “Mercedes-Benz is delighted to welcome Vertu as a new franchise partner. As a top 5 dealer group, we have been working with Vertu to identify a suitable opportunity that allows them to bring their expertise in retailing to our brand.

“Having doubled our new car volume in the last five years, Vertu are a strong fit to further support our continued growth strategy”.