Imperial expands its footprint with UK acquisition
IMPERIAL Holdings has announced its wholly-owned vehicle division, Motus, has indirectly acquired 100 percent of UK automotive dealer group Pentagon Motor for a cash consideration of R493 million.
Pentagon Motor Holdings is headquartered in Derbyshire and it operates 21 prime retail dealerships in Derbyshire, Nottinghamshire, Lincolnshire, Yorkshire and greater Manchester.
Imperial said in the year to end December 2016, Pentagon generated revenue of £495m (R8.58bn).
Imperial group chief executive Mark Lamberti said: “Imperial has strong global partnerships with leading vehicle manufacturers and we are delighted to expand our international retail footprint into the passenger and light commercial vehicle market in the UK through the acquisition…”
Pentagon was established in 1991 by current chairperson Trevor Reeve and has grown steadily from an initial Vauxhall franchise base to represent leading car and van manufacturers, Peugeot, Seat, Mazda, KIA, Renault, Fiat, Alfa Romeo, Nissan, Mitsubishi and Jeep.
The group employs 1 262 people, and Imperial said key management would remain with the business through a transitional period to ensure a smooth integration with Imperial’s existing vehicle businesses in the UK. The business would continue to operate as Pentagon Motor.
Imperial Holdings is a JSElisted South African-based holding company, active exclusively in the logistics and vehicle sectors in more than 30 countries. Imperial employs more than 51 000 people who generate annual revenues in excess of R120bn, mainly in Africa and Europe.
In a recent trading update released at the beginning of the month, Imperial said it expected to report a decline of between 15 percent and 18 percent in earnings per share for the year to end June.
It said headline earnings are expected to decrease by between 11 percent and 14 percent in the same period.
The group attributes this decline to higher foreign exchange losses on various monetary items, including working capital, intergroup loan funding and hedging instruments as well as higher finance costs resulting from higher costs of funding and higher debt levels.
Imperial will release its results on August 22.
Motus chief executive Osman Arbee said the acquisition was consistent with Motus’s strategy to deploy capital and its vehicle retail expertise in pursuit of growth and returns beyond South Africa.
“Pentagon is a well-respected and established vehicle dealership group with deep expertise and a strong national reputation in the passenger vehicle sector. It will complement our existing commercial vehicle business, which has produced commendable results since its acquisition in 2006,” Arbee said.
The group said the transaction is effective from September 1.
Imperial’s share price rose 0.39 percent to close at R185.39 on the JSE yesterday.