This article is from the Australian Property Journal archive
ASX-listed group Eagers Automotive will take control of a portfolio of car dealerships in Melbourne and the Mornington Peninsula and properties spanning 5.3 hectares, in a $245 million deal with key shareholder and director Nick Politis.
The dealerships include Mercedes-Benz Brighton, Mercedes-Benz Mornington, Essendon BMW, and dealerships in Toorak, Mulgrave and Port Melbourne.
The deal also comprises three properties covering a combined 53,500 sqm of land, with sites in Brightons and Mulgrave included. The balance of the properties will be leased on commercial terms from the sellers and third parties.
Politis holds a 27.6% stake in Eagers Automotive. He is also chairman of the NRL’s Sydney Roosters.
Eagers Automotive said the deal for “high-quality, well-balanced brand portfolio representing 12 OEM partners with a weighting towards prestige brands” will add about $1 billion in annual turnover, and take forecasts for its Victorian operations to $2.5 billion annual turnover.
The deal is comprised of $111 million for goodwill, $100 million for property and $34 million for net assets. The purchase price attributable to goodwill will be paid by the issue of $25 million worth of APE shares to the sellers, with the balance to be paid in cash.
The dealership group brands include BMW, Jaguar, Land Rover, Mercedes-Benz, MG, Mini, Mitsubishi, Nissan, Renault, Skoda, Volkswagen and Volvo, situated in the key locations of Brighton, Essendon, Mornington, Mulgrave, Port Melbourne and Toorak in Victoria.
“To be able to acquire such a high-quality, large-scale business, representing circa $1.0 billion in annual sales or more than 10% of the total revenue of Eagers Automotive, is a compelling and highly valuable opportunity for the company,” Eagers Automotive CEO Keith Thornton said, adding that Melbourne had been identified by the company as having “significant runway for growth”.
“The 12 OEM brand partners included in the transaction represent a high-quality portfolio including material prestige market weighting. Finally, the inclusion of three strategic properties, representing approximately 53,500 sqm in high-profile sites in Brighton and Mulgrave, will provide the footprint foundation to continue progress against key components of our Next100 strategy,” he said.
The transaction is also subject to shareholder approval due to the relationship between Mr Politis and the various selling entities. Eagers Automotive shareholders will be asked to approve the transaction at a General Meeting of shareholders which is anticipated to be held in early 2024.
Commenting on industry changes, Politis said, “The automotive industry is evolving as rapidly now as at any time in my career. This includes new OEMs entering the market, the transition to lower emission cars and trucks and the continuing evolution of automotive retail, all of which create great opportunities. I am convinced larger groups, like Eagers, are best placed to navigate these changes, invest with our key OEM partners and grow materially into the future.
“With $25 million of the purchase price being reinvested in Eagers shares, I personally plan to continue to play an active role as a shareholder and board member of Eagers to help identify and capitalise on the many opportunities ahead.”
