Peter Warren Automotive buys three NSW dealerships for $45m

More than a year after splashing out $104 million to purchase Penfold Motor Group, car retailer Peter Warren Automotive Holdings (ASX: PWR) has announced it is continuing its consolidation strategy with the acquisition of three dealerships in New South Wales.

In a deal worth $45 million, the company will acquire Peter Warren Toyota at Warwick Farm, Bathurst Toyota and Bathurst Volkswagen – all of which are majority owned by the Warren family, who are also significant shareholders in PWR.

In FY22, the dealerships collectively generated a turnover of $180 million with approximately 110 employees. Post-acquisition, all locations will continue to be run by the existing management teams.

“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,” Peter Warren CEO Mark Weaver said.

“The VW 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.”

Founded in 1958, Peter Warren Automotive Holdings is a new and used car retailing business with 83 franchise operations, representing car brands like Mercedes-Benz, Jeep, Honda, Toyota, Ford, Suzuki, Kia, Peugeot, Volvo and ŠKODA. The company has approximately 25 dealerships across NSW, Queensland and Victoria.

Under the latest deal, Peter Warren Automotive will acquire 80 per cent of the Warwick Farm Toyota operation and 95 per cent of Bathurst Toyota and Volkswagen.

The transaction does not involve the acquisition of any additional property, as Peter Warren Toyota is located on the Warwick Farm property owned by the company and is currently leased to the Warren Family. Bathurst Toyota and Volkswagen are also located on property owned by the Warren family and a third-party landlord.

In its update to shareholders, the car retailer said it is being impacted by an inconsistent supply of new vehicles in some areas due to biosecurity backlogs, port congestion and shipping delays. 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 company said.

Peter Warren will fund the buyout from existing debt providers under a master debt facility, with no additional security to be provided.

This transaction remains subject to shareholder approval due to the relationship between the Warren Family and the various selling entities.