Vertu Motors makes first foray into Land Rover with acquisition

Vertu Motors has agreed to acquire the entire issued share capital of Albert Farnell from Co-operative Group Motors for 31m pounds.

Farnell, which includes three Land Rover dealerships in West Yorkshire, will become a new division within Vertu.

Jatinder Aujla, the current Operations Manager at Farnell, will be appointed head of the division.

Farnell achieved total unaudited revenues of £113m and operating profit of £3.9m in 2012 and Vertu said it believes the acquisition will be earnings enhancing in the first full year of ownership.

Vertu is raising £50m before expenses though a placement of over 131m shares of 10p each at a price of 38p per share.

"We are very pleased to have received the support of existing and new shareholders for our capital raise, which both funds the acquisition and provides substantial equity funding that maintains our strong financial position and enables us to take greater advantage of acquisition opportunities to expand the group in the highly fragmented Premium and Volume segments of the market," said Chief Executive of Vertu, Robert Forrester.

Since the company was formed in 2006, it has grown to 96 sites and now sells close to 95,000 vehicles a year though its partnerships with motor manufacturers.

The acquisition of Farnell is Vertu's first entry into the British market of Land Rover.

RD