Halfords set to increase online presence following £18.4m acquisition

Halfords Group plc has completed an £18.4m acquisition of Tredz Limited and Wheelies Direct Limited, both of which are specialists in the online sale of premium bikes and accessories.

Tredz is an online retailer of premium bikes and cycling parts, accessories and clothing, which trades across the UK, whilst Wheelis provides bicycle replacements for insurance companies.

Both based in South Wales, the firms employ around 250 people and have been sold by the founders Keith and Michael Jones.

The businesses are set to continue to trade on a standalone basis and will be led by Keith and the existing management teams.

Collectively these businesses generated revenue of around £32m for the year ended 29 February 2016, up from £24m in the prior year, and EBITDA of £2.4m.

The initial cash consideration is £18.4m and has been settled from Halford’s existing borrowing facilities.

Dependent upon the financial performance of Tredz in the year ending 28 February 2017, there will be an element of deferred consideration payable in 12 months.

The total purchase price is expected to equate to an EBITDA multiple of around 7 times and the acquisition will be earnings enhancing from the first year of ownership.

Jill McDonald, Halfords chief executive, commented: “We are delighted with this acquisition, which we believe is a strong and complementary addition to the Group, extending our presence in the online market for premium bikes, parts, accessories and clothing.

“We continue to believe in the long-term growth potential of the cycling market. Keith and his management team have done a fantastic job of building a successful online retail operation and we look forward to working with them to develop and grow the businesses further.”

Keith Jones, group managing director of Tredz and Wheelies, added: “We are very proud of the businesses that we’ve grown from a small shop twenty seven years ago into a strong operator in the premium cycling market, with a team of over 250 people.

“However, the time has come for us to work with a partner on the next phase of growth. Halfords is exactly what we were looking for. With the support and resources of a large group, we look forward to building upon what we have achieved so far to drive long-term growth.”