UK car dealer group Lookers is buying its rival Warwick Holdings, which trades as Drayton Group, for £55.4m ($71m). Drayton provides car sales and aftermarket services for Mercedes-Benz in the West Midlands region of the UK.
The buyout includes seven dealerships, bringing the number of Lookers Mercedes-Benz locations in the network to 14. Lookers will now have a total of 160 dealerships in the UK’s car dealer network.
The deal is expected to be complete by the end of October. It follows Lookers’ recent announcement that it was selling its parts division to Alliance Automotive Group, a deal that is also expected to close in October.
Alliance Automotive Group is a distributor of automotive and commercial vehicle parts to the independent aftermarket in France and the UK.
Alliance has offered £120m for the business, an offer that Lookers is still considering. The sale of the parts business was aimed at financing an expansion of its dealership business.
“This transaction will significantly strengthen our ability to accelerate the growth in our core car dealership business whilst opening new opportunities to our colleagues and I look forward to sharing the benefits of this with my colleagues across Lookers in the future,” said Lookers’ CEO, Andy Bruce, about the parts division sale.
It took just one week for Lookers to make good on that intention and announce the Drayton takeover, which follows its purchase of North East-based Benfield and its 30-strong dealership portfolio last year for £87.5m.
“Together we will now be the largest Mercedes-Benz dealer in the country and one of the largest motor groups in the UK,” said Bruce. “Importantly though, despite our size, Lookers still feels like a family business that cares about its people. We believe every dealership is unique and will have its own profile of customers with their own particular demands.”
He continued: “We are currently seeing a lot of opportunity in the prestige car market as demand increases among the UK’s discerning motorists. We know that Mercedes-Benz is a fantastic brand with a rich heritage and is one that Lookers has worked well with, built and developed as part of our national network of motor dealerships.”