North East firms help raise £30m for car dealers

Jun 24 2009 by Peter McCusker, The Journal

THE head of one of the region’s fastest-growing plcs has praised the work of the two Newcastle firms which helped it successfully raise £30m to fund further expansion.

Vertu Motors raised the funds by way of a placing of shares on AIM and was helped along the way by experts at advisers Brewin Dolphin and Newcastle commercial law firm Muckle.

Robert Forrester, chief executive at Vertu Motors, said: “Muckle and Brewin Dolphin offered excellent support throughout this transaction and have provided expert advice since we were established three years ago.

“Over the past 12 months, the automotive retail sector has encountered the most challenging market conditions for many years, but we believe that opportunities are beginning to emerge.

“Our trading performance in March and April this year was ahead of expectations and used car volumes and margins ahead of 2008 levels.

“We have already successfully integrated our previous acquisitions and plan to use this funding to invest in new dealership operations and extend the productive capacity of existing operations, maximising our market share in the coming years and continuing our growth.”

Vertu Motors has worked alongside Brewin Dolphin and Muckle since its inception in 2006 and will be working with the law firm throughout the acquisition process.

Andrew Davison, partner at Muckle, said: “We are committed to supporting businesses and it has been fantastic to see Vertu Motors develop into a national leader, in just three years.

“It is encouraging that a North East company is bucking the national trend by looking to increase its market position, to ensure that it is in a position of strength for when consumer confidence returns. We wish them every success and very much look forward to working with them throughout their continued growth.”

Graeme Summers, head of investment banking at Brewin Dolphin said: “Our team’s experience in this sector is perfectly matched to Vertu’s ambitions, as it plans to grow through targeted acquisitions.”

Brewin Dolphin Investment Banking’s role included introducing the company to its institutional investors; producing the financial models to facilitate understanding of the proposition amongst the investor-base, preparing the necessary documentation and organising the investor road show.

Nick Owen, head of corporate broking at BDIB and a member of the advisory team, said: “The most exciting aspect of this transaction is that we believe it is the first in recent times to deliver capital purely to finance growth opportunities. In addition it was achieved at a discount of only 6% to the prevailing share price.”

Vertu Motors operates 45 dealerships across the UK, including Ford, Peugeot and Vauxhall, and acquired Bristol Street Motors in March 2007. The Newcastle-based motor group has grown to become the ninth biggest dealership in the country, recently announcing sales of £760m this year.