Vertu completes BMW purchases from Inchcape
06 December 2020
Vertu has completed the purchase of five BMW and Mini businesses from Inchcape plus one BMW Motorrad business and a used car site for a total cash consideration of £18.7 million plus £8.9m of used car stock finance.
Vertu paid £750,000 in goodwill for the businesses and that the financing for the dealerships is being supported by £12.76m 20-year mortgage from BMW Financial Services. The assets acquired include £16m of freehold and long leasehold properties.
Vertu’s stock market statement added: “For the year ended 31 December 2019, the business achieved revenues of £305m and a loss before tax of £6.0m. The group has a clear plan to drive performance improvements over a three-year period. A new management team, with significant BMW and MINI franchise experience, has been hired and will be integrated with existing, experienced Vertu operational management. The group’s systems and processes are being implemented immediately to facilitate business improvements in the areas of customer experience and financial performance. The businesses will be branded Vertu reflecting the continued growth of the Vertu brand in premium franchises in the UK, supported by the increasingly successful website, vertumotors.com.”
The BMW Mini sites are located in Durham, Malton, Stockton, Sunderland and York. The used car site is in York and the Motorrad in Sunderland.
Vertu has brought in BMW expert Anthony Masterson to run the division and turn around the loss-making sites. Mr Masterson was a partner in Knights BMW which sold to Lookers in 2016 and has more recently been Marshall Motor’s BMW division boss.
The sale by Inchcape is thought to be part of a plan to sell-off the retailer’s entire BMW portfolio which stood at 12 franchises at the start of the year.
Commenting on the acquisition, Robert Forrester, CEO of Vertu Motors said: “We are delighted to announce the introduction of the much sought after BMW, MINI and Motorrad franchises to the Group, previously a gap in our portfolio of manufacturer partners. The addition of these franchises has long been a strategic objective of the Group. The acquisition achieves immediate scale in a region where the Group is headquartered and already has strong representation.
“The business has previously performed at a high level and it is our intention to ensure that it returns to this previous success delivering both for customers and financially.”
Meanwhile, Vertu is also understood to have also bought an empty property in Glasgow from Lookers nextdoor to its Ford and Nissan showrooms. Vertu will run the site as a used car operation under the Maklin Motor Nation banner. Vertu has a habit of adding sites as used car operations which it later fills with a franchise. The ex-Inchcape York used car site will be operated under the Bristol Street Motor Nation banner.