Vertu snaps up Midlands dealerships for £7.9m.

Jun 27 2009 by Peter McCusker, The Journal

FAST-GROWING motor dealer Vertu has used the cash raised in a recent £30m rights issue to snap up a troubled Midlands motor group.

The Newcastle plc has bought four freehold outlets and one repair shop of Brooklyn Motor from its administrators for an agreed price of £7.9m. Vertu will now have 45 franchised operations, four non-franchised and two service operations.

Chief executive Robert Forrester said: “We are delighted to have acquired these businesses in one of our core geographical areas. As a consequence we will benefit from accruing an even stronger regional concentration.

“There is considerable scope to integrate these dealerships on to Vertu’s scalable platform, and these are excellent volume franchises that strengthen the group’s portfolio balance.”

The new dealerships are Worcester Ford, Redditch Ford, Redditch Mazda, Cheltenham Mazda and an Iveco authorised repairer in Redditch.

The business acquired complements the group’s Ford operations in Birmingham, Cheltenham and Gloucester. Brooklyn Motors was placed in administrative receivership yesterday. Vertu, which is listed on AIM, this month raised £30m in a rights issue to fund future acquisitions.

Mr Forrester said at the time: “We are finding that people still want to buy cars, despite the problems faced by others in the industry.

“With valuations at such a low level, we have the opportunity to grow our business and strengthen our position in the market in time for the recovery.”

Based on the Quayside, the firm was started in late 2006 by four former senior executives of the Reg Vardy group shortly after it had been sold to Pendragon.

They included Mr Forrester, the Sunderland company’s former managing director, and former non-executive director Bill Teasdale.

It started with the £69m purchase of Bristol Street Motors, and now employs 2,050 staff around the country, including 200 in the North East.

The company’s latest results, for the year to the end of last February, showed sales of £760.8m and profits of £68,000.

As a consequence we will benefit from accruing an even stronger regional concentration