Published by Insider Media
HALFORDS STRIKES DEAL FOR MOTORING SERVICES GROUP
Halfords has agreed a £62m deal to acquire the business behind national brands operating in the tyre and automotive servicing, maintenance and repair market. The acquisition means the majority of UK motorists will be within a 20-minute drive of a Halfords garage.
A sale and purchase agreement is in place for the acquisition of Axle Group Holdings Ltd (National) which owns National Tyres and Autocare, Viking Wholesale Tyres and Tyre Shopper brands .The consideration will be paid in cash on completion, which is expected to take place on 9 December. A further investment of about £17m will be made post acquisition on associated capital expenditure and approximately £2m on integration costs.
Headquartered in Stockport, NTA has approximately 1,200 staff across its garage estate along with a database of 1.1 million customers, while Glasgow-headquarters Viking is a wholesaler of tyres and related consumables to B2B customers, including NTA. Tyre Shopper is an online tyre retailer, where users purchase tyres online and have them fitted at NTA centres or remotely using the mobile fitting service.
Halfords chief executive Graham Stapleton said: "This acquisition helps cement our position as the UK's largest vehicle service, maintenance and repair business. It will also see us deliver on our established strategy of evolving Halfords to become a motoring services focused business, with motoring revenue set to represent more than 70 per cent of our pro-forma revenue following the acquisition.
"National has a high quality, UK-wide network of garages and mobile tyre fitting vans, and 1,400 highly skilled colleagues, providing a complementary fit with Halfords' existing operations. Post-acquisition, Halfords will have over 1,400 fixed or mobile motoring services locations, servicing a broad range of vehicles and delivering 7.5 million motoring jobs a year. This increased scale will bring the majority of UK-mainland motorists within a 20-minute drive of a Halfords garage, with even more vans available to provide mobile services at their home or work."
He added: "Given our recent track record of successfully acquiring and integrating businesses, and the potential we see to further grow our motoring services business in other areas of the country, I am very excited about our future growth prospects, and I look forward to welcoming the new teams to the business."
The acquisition accelerates Halfords' motoring services strategy surpassing its current target of 550 garages and 200 consumer vans and, post-completion, Halfords will have approximately 604 garages, 234 consumer vans and 190 commercial vans. Including retail stores this will mean a combined total of more than 1,400 fixed or mobile motoring services locations.
Halfords has raised approximately £63.4m with a non-pre-emptive placing, together with a management subscription and retail offer, which it intends to use to part-fund the acquisition and maintain balance sheet flexibility for future opportunities.
James Dow of Dow Schofield Watts provided corporate finance advice to Axle Group.