Automotive Holdings Group expands with $184m in truck and dealer buys
Automotive Holdings will extend its car and truck dealerships and logistics business in two deals worth $184 million.
The Perth-based company, which entered a trading halt on Tuesday, has struck a deal to buy Scott’s Refrigerated Freightways for $116 million and NSW car dealership Bradstreet Motor Group for $68 million.
The Scott’s deal will be funded from $71 million cash, $15 million of AHG shares and $30 million of finance leases, the company said in a statement to the ASX.
AHG managing director Bronte Howson said the acquisition would deliver $4 million a year in savings by the end of 2016 and make the company the biggest temperature controlled carrier in Australia.
Sydney-based Scott’s is forecast to generate sales worth $237 million this year and earnings before interest, tax, depreciation and amortisation of $25 million.
The Bradstreet deal will lift AHG’s network to 169 franchises across 96 dealerships in Australia and New Zealand.
Bradstreet’s dealerships are mainly in Newcastle and represent seven car makers: Toyota, Mazda, Holden, Nissan, Kia, Subaru and Great Wall.
“This is a strategic addition to our NSW dealership network,” Mr Howson said. “The dealerships operate from well-maintained properties on long-term leases and require no significant capital expenditure.
“They also complement our established Newcastle truck hub, giving AHG a very strong presence in the Newcastle region.”
The Bradstreet deal will be funded in cash. Both acquisitions are subject to the completion of due diligence.
AHG employs about 5000 people across Australia and New Zealand. Its shares closed flat on Monday at $3.60.
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