ASX-listed Automotive Holdings Group, Australia's biggest auto retailer, has bought two dealerships in the Auckland suburb of Manukau for $7.5 million, expanding its footprint to nine franchises in the country's biggest city.
Perth-based AHG has agreed to acquire co-located Hyundai and Mitsubishi dealerships near its existing Holden and Nissan sites in Manukau, and will subsume the operations into its existing New Zealand business, the company said in a statement. The Australian firm will pay $7.5 million for goodwill plus stock and assets, with the deal expected to settle late next month.
"This acquisition adds two important volume brands to our New Zealand portfolio and aligns with our automotive growth strategy to acquire and aggregate dealerships in and around existing AHG dealerships," managing director John McConnell said. "These are well-run businesses and brands that can be rolled into an existing AHG hub with a number of initiatives that we can put in place to drive both incremental revenue and cost synergies across both dealerships."
AHG's New Zealand holding company LWC reported a profit of $6.7 million in the June 2017 year, on revenue of $472 million. That compares to a profit of $6.6 million on sales of $438 million in 2016.
New Zealand's auto sector has been enjoying a purple patch with record sales of new car purchases as a strong kiwi dollar cuts the cost of vehicle imports, an expanding population needs private transportation, and a robust tourism sector stoked demand for rental.
AHG shares slipped 0.1 percent to A$3.685 on the ASX and have declined 5.5 percent over the past 12 months.
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