UK-based automotive service group BCA has bought rival UK transport and logistics provider Paragon Automotive for £105m ($138.5m). The buyout is subject to further 'earn-out payments' of up to £30m, based on the achievement of financial and market targets, according to BCA.
BCA said the latest buyout was an important step in the progression of its strategy to deliver “a broad-based automotive support services business”. It follows BCA's takeover of UK vehicle preparation and storage expert Ambrosetti earlier this year and the purchase in September 2015 of British vehicle carrier Stobart Automotive from Eddie Stobart Logistics.
Paragon provides outbound services for OEMs and fleet operators including processing, storage and refurbishment. During 2015, Paragon processed over 600,000 vehicles from its facilities.
At the beginning of this year it started operations at its new £20m UK facility at Stallingborough near the port of Immingham, processing all of Kia Motor’s imported vehicles. That followed the signing of a £115m ($176.5m) 10-year deal with the South Korean carmaker. It also launched a new division to help carmakers and fleet operators manage electric and hybrid vehicles through the de-fleet and refurbishment process in May.
“The acquisition of Paragon gives us a key component in our transformation of BCA to the pre-eminent managed vehicle services provider to the UK and ultimately European automotive industry," said Avril Palmer-Baunack, executive chairman of BCA. "Following this transaction, BCA will manage over 1.5m cars a year in the UK and the company sees significant potential to grow this new division organically as well as delivering operating synergies.”
BCA has yet to clarify what Palmer-Baunack means by “operating synergies”.
As well as takeovers, BCA has been on a strong recruitment drive of late. Last month it appointed Dean Hulse as managing director of BCA Logistics. That move followed the announcement that Konrad Zwirner had joined the company as European strategic development director. In March, meanwhile, Tony Booth was appointed to a newly created role as managing director of BCA Technical Services, a division of BCA Marketplace.