Fri, 03 Dec 2021 | BUSINESS SALE
Halfords Group has announced that it will acquire automotive servicing group Axle Group Holdings in a deal worth £62 million. In the year ending December 31 2020, Axle reported gross profits of £72.2 million and post-tax profits of £460,000 on revenue of £157.6 million.
The deal will see Halfords take over Axle Group’s three brands: National Tyres Autocare, Viking Wholesale Tyres and Tyre Shopper. The acquisition forms part of Halfords’ move to shift focus from its cycle retail business to its motoring services operation.
Post-acquisition, motoring will generate over 70 per cent of Halfords’ revenue, according to CEO Graham Stapleton. The company said the deal was ''both strategically and financially compelling, delivering on Halfords' objective of evolving into a business more heavily weighted towards Motoring Services.''
With the acquisition, Halfords will expand its network within the UK to around 1,400 locations. Over the past three years, Halfords has also moved to acquire Tyres on the Drive, Universal and McConechy’s.
The debt-free deal will be paid in cash upon its anticipated completion on December 9 2021 and was funded by a placing of new shares which raised around £63.4 million. Post-acquisition, Halfords has confirmed it will invest around £17 million in associated capital expenditure, along with approximately £2 million in integration costs.
Halfords expects the deal’s efficiencies to add £18 million to its annual core cash profits by the fifth year following completion, with a third of that forecast to come within the first year.
Graham Stapleton said: "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.”
Regarding the company’s future acquisition plans, Stapleton 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."
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