Fri, 07 Oct 2022 | BUSINESS SALE
Staffordshire-based commercial tyre firm The Lodge Tyre Company Ltd has been acquired by motoring and cycling products group Halfords in a deal worth up to £37.2 million. The acquisition will see a consideration of £33.2 million paid upon completion, with a further £4 million in 2025 subject to performance.
If the full amount is reached, the deal will represent around a 16.1x multiple of Lodge Tyre’s operating profits of £2.3 million for the year ending March 31 2021, which the firm generated on turnover of £68.1 million.
Headquartered in Stafford, Lodge Tyre provides on-demand and emergency cover to customers across the Midlands, East Anglia, North Wales and the North West. The firm operates from 50 garages and a warehouse in Birmingham and has a fleet of 248 mobile tyre fitting vans. The deal takes Halfords’ UK-wide garage services business to 656 garages, nine warehouses, 440 commercial vans and 253 consumer vans.
Lodge Tyres’ existing shareholders will remain part of the Lodge management team post-acquisition and no job losses are expected from the firm’s 400-strong workforce. Halfords says that the deal makes it the UK’s largest commercial tyre provider and adds that it has significant growth plans for the firm.
Halfords CEO Graham Stapleton said: "The acquisition of Lodge Tyre is yet another example of Halfords’ strategic aim of becoming a motoring services-focused business, and will mean that motoring accounts for over three quarters of our total revenue. The current trading environment reinforces the rationale for building ever-more resilient, needs-based revenue streams, which is exactly what the motoring category offers.”
"Within that, the nature of the commercial tyre market means that it is non-discretionary and therefore extremely well insulated against macroeconomic uncertainty. Lodge is an outstanding operation that perfectly complements our existing commercial tyre businesses of McConechy’s and Universal Tyres, and gives us a much greater reach across the UK.”
"We were already the UK’s market-leading motoring service provider to consumers, and this acquisition will also make us the UK’s largest commercial tyre provider.”
Gowling WLG advised Halfords on the deal, which follows its acquisitions of Tyres on the Drive, Universal and McConechy’s over recent years. Gowling’s Ragi Singh commented: "It has been fantastic to work with Halfords again on another acquisition which takes them closer to achieving their stated objectives.”
"These complex, strategic transactions play to our strengths and we are very proud to have helped Halfords complete this step towards their aim of becoming a motoring services-focussed business as well as the UK's largest B2B commercial tyre provider."
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