Automotive Holdings Group has signed a $12 million agreement to acquire a Toyota dealership 30 kilometres from Melbourne's CBD.
Automotive Holdings Group has signed a $12 million agreement to acquire a Toyota dealership 30 kilometres from Melbourne's CBD.
In a statement to the Australian Securities Exchange AHG said the acquisition at Ferntree Gully provides the company with an important footprint in the Melbourne car market.
AHG expects to settle the Heads of Agreement by September 30.
"Toyota is currently Australia's number one selling automotive franchise in Australia with approximately 21 per cent market share nationally," said AHG managing director Bronte Howson.
"This is a large, quality Toyota dealership with annual turnover of more than $80 million and has recently undergone a major refurbishment.
"We see a great opportunity to drive sales and grow the business."
See company statement below:
Automotive Holdings Group Limited (ASX: AHE), Australia's largest automotive retailer, is pleased to announce it has entered into a Heads of Agreement to acquire the Graham Werner Toyota dealership located 30km from the Melbourne CBD at Ferntree Gully.
The acquisition will provide AHG with an important footprint in the Melbourne automotive passenger vehicle market, a key target for the Company. AHG also operates the Prestige Hino truck dealership in Dandenong, a short distance from Ferntree Gully.
AHG will pay approximately $12 million to acquire the dealership and net assets. The acquisition will be funded by AHG's cash reserves and will be earnings accretive from day one. Settlement is anticipated for 30 September 2010.
AHG Managing Director Bronte Howson said the proposed acquisition enables AHG to increase its exposure to the Toyota brand.
"Toyota is currently Australia's number one selling automotive franchise in Australia with approximately 21 per cent market share nationally," said Mr Howson.
"This is a large, quality Toyota dealership with annual turnover of more than $80 million and has recently undergone a major refurbishment. We see a great opportunity to drive sales and grow the business.
"This allows AHG to continue to build on its existing long term relationship with Toyota and we will use our brand knowledge, coupled with the strong customer base, to add value to both the dealership and the Group."
Mr Howson said it will be appointing experienced AHG dealer principal, Mr Mark McDonnell, to manage the business from the settlement date.
