The acquisition is being funded from existing bank facilities through a conditional contract, with the condition being the successful conclusion of the sale of the Parts Division, which is expected to complete by the end of October.
Drayton Group is a highly successful business with a reputation for providing outstanding customer service. Founded originally in 1915, Drayton Group has evolved into a luxury car retailer offering sales, parts, service and repair facilities for new and used cars and is a four-time winner of MercedesBenz Retailer of the Year. The company operates from seven locations in Stoke on Trent, Stafford, Shrewsbury, Wolverhampton, Walsall, Stourbridge and Worcester.
The acquisition will increase Lookers partnership with Mercedes Benz and Smart where the new combined business will have an annual turnover in excess of £600m and will provide further coverage to the Group’s offering to customers in the Midlands.
The statutory accounts for Drayton Group for the year ended 31 December 2015 reported turnover of £276m and profit before tax of £5.2m. The Company had gross assets of £84.2m and net assets of £22.0m.
This acquisition is expected to be earnings enhancing for the year ending 31 December 2017.
Andy Bruce, Chief Executive of Lookers, said:
“As noted in our announcement on 10 August 2016, we are looking to accelerate growth and today’s announcement shows we are putting the proceeds from the proposed disposal of the Parts Division to work as quickly as possible. We look forward to welcoming the Drayton team to the Lookers Group as it will enable us to increase our growth by adding value through excellent execution and targeted acquisitions. This acquisition will also help to build the Company’s presence in the Midlands.
I have been very impressed with the quality of Drayton Group’s business, outstanding customer service and commitment to employee satisfaction. These qualities complement Lookers culture and will allow us to advance our strategy of having the right brands, in the right locations in order to take advantage of further growth opportunities. “