Automotive Holdings Group (AHG) Australia’s largest automotive retailing and logistics group, continues to add to its chain of car dealerships at a cost of more than $40 million.
In separate deals announced yesterday and a week ago, the Perth-based company has bought dealerships in Melbourne and several other cities and sold another.
The company yesterday revealed it had acquired the City Mazda dealership in South Melbourne for $24 million (mostly for goodwill).
AHG managing director Bronte Howson said the transaction represented a valuable addition to the Company’s presence in the Victorian capital.
The City Mazda dealership is a high volume franchise located adjacent to the Group’s existing South Melbourne Holden, HSV and Hyundai dealerships, offering a range of synergies.
“Mazda is a high priority franchise for our Victorian automotive operations and there are very limited opportunities to acquire high volume metropolitan Mazda franchises in any location,” said Mr Howson.
“This opportunity is located adjacent to an existing AHG automotive hub and we expect to drive both revenue and cost synergies across the two locations. The transaction is firmly in line with our ongoing automotive aggregation strategy and an excellent opportunity to secure a Mazda franchise in Victoria that can be integrated into an existing AHG retail hub.”
AHG said the purchase “will add significant scale and profit to AHG’s Victorian operations” and will settle in July.
On May 23, Automotive Holdings said it had agreed to acquire the Lance Dixon group of dealerships at Doncaster in Melbourne’s inner suburbs for $12 million (mostly for goodwill), stock and assets.
The Group has also acquired a Hyundai dealership at Penrith in Sydney’s western suburbs for $6.5 million plus stock and assets, and agreed to sell its Duncan Nissan business in Perth’s Victoria Park.
AHG managing director Bronte Howson said the transactions represented an effective rebalancing of the Group’s broad portfolio of brands and an exciting entry into the luxury vehicle sector in Victoria.
Earlier, Automotive Holdings said it has completed the divestment of its Covs parts business to GPC Asia Pacific (GPC).
AHG and GPC announced in July, 2015 they had reached agreement on the sale of all 25 stores in the Covs network. The transaction was subsequently revised after competition watchdog revealed reservation. As a result, AHG retained four of the stores at Albany, Esperance, Karratha and Port Hedland in Western Australia.
AHG will rebrand the four retained renamed Covs stores to avoid confusion with the Covs stores to be operated by GPC Asia Pacific.
AHG acquired Covs Parts from the Coventry Group in 2011. The Company restructured the business and has retained the exclusive distribution of Ford and Holden OEM parts in Western Australia.
Automotive’s shares dipped half aper cent t0 $3.88 in a market that sold off by 1%.
