Turners Acquires Buy Right Cars Group

Turners Acquires Buy Right Cars Group

Turners Limited (NZX : TNR) announced it has reached agreement to purchase the business of Buy Right Cars, the leading Auckland based used motor vehicle import and dealership network.

Buy Right Cars was established 18 years ago and has grown to become one of the largest participants in the Auckland market, operating from eight sites with a fully equipped mechanical and import compliance workshop more recently established in Manukau City.

Turners will pay a total consideration of $15.3 million plus stock with 78% of the purchase price settled in cash and 22% in Turners Limited shares. Approximately $6 million of the consideration will be determined by the performance of the Buy Right Cars business under an earn-out arrangement over two years.

The sale and purchase is subject only to bank funding terms becoming unconditional to Turners satisfaction. Settlement is expected to occur on 29 July 2016.

Turners Limited CEO, Todd Hunter, advised that the Buy Right Cars business will be run as a stand-alone business and all current management and staff in the business will be retained.

“We expect the business will contribute earnings before interest and tax in excess of $4 million in the first year under our ownership, with profit increases expected thereafter. Additional synergies are expected to arise for Turners existing finance and insurance businesses.

“The acquisition significantly increases our footprint and presence in the key Auckland market where we are currently under weighted compared to our higher market share in other regions. It also achieves a number of our other strategic objectives for the group, including stepping up our imports of used vehicles and achieving better control over the motor vehicle compliance process. With a high percentage of Buy Right Cars sales financed, we will also continue to increase motor vehicle receivables and related consumer insurance with greater control over origination.”

Turners Limited Chairman, Grant Baker, said Buy Right Cars had an excellent reputation and had established a comparative advantage achieving good growth in recent years which can be further built on.

“We have been impressed with what principal and majority owner Brandon Orlandini and his management team have achieved in the competitive Auckland market.

“The purchase of Buy Right Cars completely aligns with our strategy of growing group profit through targeted M & A that takes advantage of the synergies across our group. We are actively considering and evaluating a number of further opportunities.”

ENDS

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