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Shares of Marshall Motor (LON: MMH) jumped at the open after the automotive retail company said it has acquired Motorline Holdings Limited for £64.5 million.
Motorline is a dealer group headquartered in Canterbury and operating across Kent, West Sussex, Surrey, Berkshire, Bristol, South Wales, and the West Midlands. Its consolidated revenues for the year ending 31 December 2020 were £695.2 million with a profit before tax of £6.1 million.
The deal was funded from Marshall's existing cash resources. The company's net assets on acquisition include approximately £20 million of cash and around £10 million of debt.
In addition, the London-listed firm has separately acquired a related freehold property for £2.9 million and has the option to purchase two additional strategic freehold properties for £24.9 million.
“The Acquisition is in line with the Group's strategy which includes growing scale with its chosen brand partners; annual revenues expected to exceed £3bn,” Marshall Motor said in its statement.
The deal means Marshall will add seven further Nissan franchises to its portfolio, making it the fourth-largest Nissan retail partner in the UK, with
the four additional Peugeot franchises make it the joint second-largest Peugeot retail partner in the UK.
Daksh Gupta, CEO of Marshall Motor, commented: “Motorline is an extremely well-respected, long-standing business. The Obee family have overseen a significant expansion of the business in recent years and have invested in a market-leading property portfolio.
“The acquisition has been funded from existing cash resources and is expected to generate attractive financial returns for our Group.
“We are delighted to begin new and significant partnerships with Toyota/Lexus and Hyundai. These brands, with a combined market share in the UK of over 11%, have been a target for the Group for some time and the acquisition of Motorline provides immediate scale with each of them.”
The news has seen the company's shares climb as high as 266p on Thursday. Although the rally has lost some momentum, with shares currently trading at 258p, up 6.28%.
Marshall Motor shares are traded on the London stock exchange's AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are MMHshares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies
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