Alpha Auto says the acquisition is a ‘compelling opportunity’ to push into the United Kingdom for the long-term.
Toronto-based Alpha Auto Group is reaching across the Atlantic with a transformational deal to acquire one of the United Kingdom’s largest dealership groups.
Alpha Auto ownership and the board of Lookers plc, a publicly traded company with 147 dealerships across the United Kingdom and Ireland, announced the big-ticket deal June 20.
Global Auto Holdings Ltd., a special-purpose acquisition company formed by the owners of Alpha Auto to carry out the purchase, will pay Lookers shareholders 120 pence in cash for each share of the nearly century-old dealership group. The agreement values Lookers at 465.4 million pounds (about $588 million).
Kuldeep Billan, executive chairman of Alpha Auto, said the acquisition is a “compelling opportunity” to push into the United Kingdom for the long-term.
“With the U.K. auto retail market undergoing substantial change, including the adoption of new distribution models, we believe that the [combined company] is well positioned to navigate the current environment with geographically diversified operations and a focus on operational excellence,” Billan said in a release.
The deal will supersize the privately owned Canadian dealership group overnight.
Alpha Auto currently owns 10 new-vehicle dealerships in Canada and five in the U.S. It also has two used-vehicle stores south of the border. The company, formed in 2014, claims to be among the largest Canadian auto retailers, based on earnings.
Lookers’ dealership count, meantime, totals nearly 150. The company, which began selling cars in 1910 after several years as a bicycle retailer, represents 35 manufacturers across the new-vehicle, motorcycle and light-duty commercial vehicle segments. In 2022, the company posted $5.4 billion in revenue and sold about 163,000 vehicles.
Based in Altrincham, U.K., in Greater Manchester, Lookers employs about 6,500 staff.
Among the rationales for the buyout, the two companies said the combined entity will have the expertise of two “deeply experienced” management teams, allowing the group to navigate ongoing changes in the global auto sector.
“It will create a business of greater scale, and bring together two successful businesses with complementary OEM relationships, and a strong platform to support future growth in the U.K.,” Lookers CEO Mark Raban said in a release.
A shareholder vote will be required for the deal to go through, though it already has significant backing.
Shareholders representing 42.1 percent of Lookers shares have pledged to support the purchase in “irrevocable undertakings and letters of intent.”
Lookers’ board of directors has also unanimously advised the company’s shareholders to approve the takeover, which offers investors about a 35 percent premium on shares, based on the company’s June 19 closing price.
The deal is expected to close in either the third or fourth quarter of this year.
