Halfords’ expansion goes on with £15m deal for Universal group

HALFORDS, THE UK’s leading motoring and cycling firm, is to buy Universal Tyre and Autocentres, a well-established motoring services provider, for £15m.

Around £9m of the purchase price relates to the acquisition of real estate and the net cash position of the business, with the remaining £6m paying for the underlying trading business.

Halfords intends to sell and lease back the property within the next few months.

Universal specialises in tyre services, including the supply and fit of tyres for a wide range of vehicles, from cars to commercial and agricultural vehicles, as well as providing general car maintenance and repairs such as brakes, servicing and MOT.

Universal is set to report revenue in excess of £31m and EBITDA in excess of £1.5m for 2020.

Post-acquisition, Halfords said it is confident it can deliver synergies to the combined business.

This acquisition takes Halfords closer to its stated ambition of having over 550 garages in the UK and builds its coverage of the commercial truck and van market.

Following the transaction, it will have 374 garages, 185 commercial vans, and 136 Halfords Mobile Expert vans operating in its Autocentres business.

Combined with its 404 retail stores, Halfords will provide motoring services from over 1,000 locations, giving customers “unmatched levels of convenience across the country”.

Graham Stapleton, Halfords’ chief executive, said: “We have a clearly stated strategy of building a market-leading motoring services offer and the acquisition of Universal is another important step forward in helping us to achieve that goal.

“We continue to see strong demand for our Autocentres, for our expanding fleet of Halfords Mobile Expert vans, and for our growing commercial business.

“Universal will help us to meet that demand whilst also expanding our geographic footprint in a market for which we see significant potential.”

Analyst Jonathan Pritchard, at Peel Hunt, said: “Universal is profitable in its own right, but it will become more so under Halfords, in our view.

“Halfords wasn’t obliged to announce the deal as it is small, but it’s valuable that it did as this shows that the strategy is ongoing to widen the reach of Autocentres.

“The deal will mean that there are now 374 garages on the Autocentres side of the group.”