Turners in $15.3m deal for Auckland's Buy Right Cars
Turners Group [NZX: TNR], the financial services firm, will buy Auckland used car importer and dealer network Buy Right Cars for $15.3 million in cash and shares, which it says will give it a bigger presence in the country's biggest city.
Auckland-based Turners will pay about $11.9 million in cash and $3.4 million in shares for Buy Right Cars, with $6 million based on the dealership's performance over the next two years, the company said in a statement. The deal is subject to bank funding terms becoming unconditional and is expected to settle on July 29.
"The acquisition significantly increases our footprint and presence in the key Auckland market where we are currently under-weighted compared to our high market share in other regions," chief executive Todd Hunter said. "With a high percentage of Buy Right Cars sales financed, we will also continue to increase motor vehicle receivables and related consumer insurance with greater control over origination."
Turners became the name for the group after Dorchester Pacific acquired Turners Auctions in 2014 to complement its largely automotive loan book and insurance business. It survived the collapse of many finance companies in the wake of the global financial crisis. Since then, it has been on a buying spree, adding Levin-based lender Oxford Finance, Greenwich Life Insurance and Christchurch-based Southern Finance.
The acquisition of Buy Right Cars will add eight dealer sites across Auckland and a workshop recently set up in Manukau. The unit is expected to add more than $4 million to earnings before interest and tax under Turners' first year of ownership, rising after that.
Chairman Grant Baker said the company is still looking at other acquisitions.
Buy Right Cars's vendors include founder Brandon Orlandini, who owns 85% with Ivo Orlandini and John Radley, and general manager Qiuchee Wong with 15%.
Turners shares rose 1.7% to $3.05.