AUTOMOTIVE Holdings Group has continued its national expansion by agreeing to acquire the Zupps Group, Queensland’s largest privately owned automotive retailing group for $117.4 million. Zupps has 32 franchises operating from 18 locations and expects to generate revenue of $670 million in the 2006-07 financial year. AHG said the acquisition would consolidate its position as Australia’s largest automotive retailer, operating 86 franchises across four Australian states and NZ. The purchase will be funded through a $90.4 million shares placement and a $30 million issue of AHG shares to the Zupp family. AHG chief executive Bronte Howson said the Zupps acquisition was expected to be immediately earnings per share accretive. “The Zupps Group business is well-managed, operates quality dealerships and provides AHG with an outstanding beach head in Queensland,” Mr Howson said. Settlement of the transaction is scheduled for May 1 2007. AHG said interests associated with major shareholder and former director Vern Wheatley intend to join other significant shareholders in participating in the placement. The balance of the raising will be fully underwritten by Bell Potter Securities and will be placed with institutional and sophisticated investors. AHG will also launch a share purchase plan to allow existing shareholders the opportunity to subscribe for shares in AHG up to the maximum legal value of $5,000 at the same price as the institutional placement. Zupps is AHG’s second major purchase since its share market float in November 2005.
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