The company said it will pay $45 million for an 80 per cent share in the Toyota dealership at Warwick Farm, and 95 per cent of the Toyota and Volkswagen dealerships at Bathurst.
It is Peter Warren Automotive’s (PWR’s) second major acquisition in two years following the November 2021 purchase of 10 dealerships from Penfolds, marking PWR’s first move into Victoria.
PWR said that the deal is expected to be immediately EPS accretive after funding costs and that the dealerships “will add substantially” to the company’s order book that is increasing as new vehicle demand exceeds supply.
It said the transaction is approved by Toyota and is now subject to shareholder approval for which it expects to hold an EGM in July this year.
PWR reported to the Australian Securities Exchange (ASX) that current dealer principals and key management will continue to operate the dealerships and that Toyota Motor Company Australia requires dealer principals to hold minority shareholdings.
Volkswagen Bathurst
In its report to the ASX, PWR said that for the financial year ended June 30, 2022 the three dealerships generated a combined turnover of $180 million with about 110 employees.
“The businesses will continue to be run by the existing management teams, providing strong continuity for customers and the OEM partners,” the report said.
PWR CEO Mark Weaver said: “We are delighted to continue the delivery of our consolidation strategy with an investment in Australia’s market leader, Toyota.
“This milestone provides opportunity for further expansion as we continue to grow in a highly fragmented market.
“The Volkswagen and Toyota operations are well-run dealerships and we are excited to welcome them to Peter Warren. We expect the acquisition to deliver significant value to shareholders and be immediately EPS accretive after funding costs.”
The acquired dealerships will add substantially to Peter Warren’s order book, which continues to grow organically as new vehicle demand exceeds supply.
The company said that it was “being impacted by inconsistent supply of new vehicles in some areas, due to biosecurity backlogs, port congestion and shipping delays.”
Peter Warren Toyota
“In other areas full supply exists. These supply dynamics impact the scheduling of customer deliveries on a week-to-week basis.
“Both brands to be acquired are experiencing similar supply chain dynamics, impacting customer delivery schedules.”
The ASX report said that the transactions do not involve the acquisition of any additional property.
“Peter Warren Toyota is located at the Warwick Farm property owned by the company and currently leased to the vendors, being the Warren Family,” it said.
“Bathurst Toyota and Volkswagen are located on property owned by the Warren family and a third-party landlord.
“The company (PWR) will enter new long-term leases for the operations in Bathurst, on arm’s length commercial terms.”
PWR has a 60 year history of automotive trading in Australia and now operates more than 80 franchise businesses and represents more than 25 OEMs across the volume, prestige and luxury segments.
It operates under various banners including Peter Warren Automotive, Frizelle Sunshine Automotive, Sydney North Shore Automotive, Mercedes‐Benz North Shore, Macarthur Automotive, Penfold Motor Group and Euro Collision Centre across the eastern seaboard.
By Neil Dowling