LONDON, UK: Marshall Motor Holdings has acquired the business and assets of a portfolio of Volkswagen and ŠKODA passenger and commercial vehicle franchises from Jardine Motor Group UK Limited for up to £22.3 million cash including £13.0 million of inventory.

The businesses comprise six Volkswagen passenger car franchises in Aylesbury, Harlow, Letchworth, Loughton, Milton Keynes and St Albans together with a Volkswagen commercial vehicle franchise and bodyshop in Loughton and a ŠKODA passenger car franchise in Milton Keynes.

Jardine Motor Group (JMG) also operates a Volkswagen authorised repairer and Approved Used car operation in Towcester which is excluded from the transaction. JMG will be relinquishing this franchise as part of the Acquisition.

The Volkswagen franchise in Aylesbury shares a site with an Audi Approved Used business which is being retained by JMG. Completion of Aylesbury Volkswagen will be deferred pending completion of the legal process to sub-divide the site. It is expected that this process and the transfer of the Aylesbury Volkswagen business will be completed in 2020.

Aggregate revenue for these Businesses was £196.1 million in the year ended 31 December 2017 and £212.8 million for the year ended 31 December 2018 with a loss before tax in these years of £3.3 million and £2.8 million respectively. As a result, the acquisition is expected to be earnings dilutive in 2020 and 2021 whilst the Group improves the operational performance of the Businesses.

The total consideration agreed for the fixed assets and goodwill of the Businesses will be up to £9.3 million, including deferred consideration in respect of the Aylesbury business, funded from the Group’s existing resources.

The fixed assets include £4.3 million in respect of freehold/long leasehold properties in Letchworth and St Albans and the goodwill is £3.6 million. In addition, excluding Aylesbury, the Businesses held £13.0 million of inventory of motor vehicles, parts and other stock at completion which will be primarily funded via the Group’s existing stock funding facilities.

The Volkswagen Group is one of the world’s leading automobile manufacturers and the largest carmaker in Europe. MMH partners with all of the Volkswagen Group’s core brands: Volkswagen Passenger Cars, Audi, SEAT, ŠKODA and Volkswagen Commercial Vehicles.

Marshall Motor first partnered with Volkswagen in 2012 and has significantly strengthened this partnership over the last seven years. The Acquisition, completed with the full support of Volkswagen Group UK, is in line with the Group’s strategy to become the UK’s premier automotive group through growth with existing brand partners in new geographic territories in the UK. Given the changing motor retail landscape, that establishing further scale with brand partners is of paramount importance.

Alex Smith, Managing Director of Volkswagen Group UK, said: “We are pleased to have extended our relationship with Marshall, a trusted partner of Volkswagen Group here in the UK, demonstrated by the fact that it is now our largest partner in the UK by number of locations. Marshall has demonstrated its commercial and customer focus capabilities over the long term and we are confident in its ability to maximise the operating performances of these businesses.

The Volkswagen Group is investing significantly in its future product portfolio and having strong retail partners such as Marshall is key to delivering these exciting new products to our customers.”

Daksh Gupta, Chief Executive of Marshall Motor, said: “I am delighted that we have further strengthened our already excellent relationship with Volkswagen Group UK with this acquisition. While the acquired businesses are currently loss making, we are confident in their future potential. The businesses are in excellent locations that are contiguous to our existing Volkswagen and ŠKODA franchises and each site is fully compliant with the latest brand requirements.

It is an exciting time to extend our partnership with Volkswagen Group UK as the impact of its significant investment in electrification and mobility services will be demonstrated. We are extremely proud to represent Volkswagen Group and wish to thank the UK management teams of each brand for their support for this acquisition.

I am also delighted that we have been able to extend our partnership with both the Honda and Volvo brands, each of which we have long established and scaled relationships with. I am also pleased to establish a new relationship with LEVC.

Finally, I would like to extend a warm welcome to all colleagues of our recently acquired businesses to Marshall and look forward to working with them over the coming years.”