Vertu Motors has bought four Volkswagen Passenger car dealerships in West Yorkshire from Sytner Group for £9m and said it is looking for more sites in the county.
The purchase of four substantial Volkswagen leasehold dealerships in Leeds, Huddersfield, Harrogate and Skipton will expand the group’s Vertu Volkswagen brand. The firm said the deal will complement its existing 13 outlets in Yorkshire, comprising the Nissan, Renault, Jaguar, Land Rover, Vauxhall and Honda brands.
Vertu expects the acquisition to be earnings enhancing in the first full year of ownership.
After the acquisition, the group will operate a total of nine Volkswagen Passenger car dealerships.
Robert Forrester, CEO of Vertu Motors, said: "Yorkshire is a great place to sell cars. It's got a heavy population - a very concentrated population - so we've got a lot of customers for both sales and after sales.
"Yorkshire has also got a lot of very good people working in the industry and a number of very strong dealerships. They know how to delight customers and sell cars."
Mr Forrester said Vertu had been very "underweight" in Yorkshire.
"We've now got 13 dealerships in the county and I think we could have well above 20," he said.
"We didn't have VW in Yorkshire before this deal. We want to be in all the major towns and cities in Yorkshire. We are not in York or Wakefield yet so there is plenty of scope in Yorkshire."
Earlier this month, Vertu opened two new franchise outlets for Hyundai in the North East. Hyundai has started trading at Silverlink, North Tyneside in the group’s former Infiniti dealership.
In addition, Hyundai has been added to the existing Ford and Honda operation in Morpeth, Northumberland. This brings the number of Hyundai outlets operated by the group to 10.
Mr Forrester said: “We are delighted with these changes to our portfolio, especially the Volkswagen acquisition. The addition of these excellent dealerships augments the group’s representation of the Volkswagen brand and expands our operational footprint in Yorkshire.
"These portfolio changes reflect the group’s strategy to continue to grow a significantly scaled franchised dealership business built on the back of a strong balance sheet, scalable operational systems and excellent relationships with its manufacturer partners.”
Analysts at Liberum said: "We see the acquisition as a good strategic fit and it is good to see Vertu back on the acquisition track after a pause of one year, with Vans Direct the last deal in January 2019."
The £9m price includes a payment of £1.35m in respect of goodwill. The consideration has been settled in cash from the group’s existing resources.
For the year ended December 2018, the combined management accounts of the dealerships acquired showed that they achieved revenues of £112m and a profit before tax of £600,000.