Lookers to sell off automotive parts division in multi-million pound deal

Auto dealer Lookers has this morning (August 10) announced a conditional agreement to sell its parts division to automotive parts distributor Alliance Automotive UK Ltd.

Subject to shareholder approval, the £120m deal is expected to complete by the end of October 2016.

In the 12 months to December 31 2015, Lookers’ parts business generated £218.8m in sales and a £12.6m underlying operating profit.

Additionally the division, which distributes automotive part brands such as BTN Turbo, FPS and Apec Braking Parts, recorded gross assets of £155.7m.

Manchester-headquartered Lookers believes that, given the current low level of interest rates available on cash deposits, the transaction with Alliance Automotive Group will initially be earnings dilutive until the capital can be redeployed through acquisitions in its motor division.

Following the deal, Lookers’ Neil Davis, the managing director of the parts division, will retain his post under Alliance Automotive’s ownership but will no longer be a Lookers director.

Andy Bruce, the CEO of Lookers, said of the transaction: “I am pleased to announce this conditional agreement which the Board believes is in the best interest of shareholders.

“The offer from Alliance Automotive is an attractive one and will enable us to focus on what we do best; buying and selling cars, and adding value through acquisitions.”

He continued: “We are already at advanced stages of negotiation on the acquisitions of two premium-branded car dealership businesses and hope to make further announcements on these in the coming weeks.

“I would also like to thank our colleagues in our parts division for their contribution to the wider Lookers business.”