Inchcape sells UK retail division to Group 1

15 April 2024

Group 1 will more than double in size in Britain with the acquisition of Inchcape’s UK retail division later this year.

Group 1 CEO Daryl Kenningham

Inchcape has revealed it is to sell its UK retail division to US-owned Group 1 for £346 million. The sale is expected to complete during Q3 2024 and involves £100m being returned to Inchcape shareholders through a share buyback programme.

Inchcape revealed it was considering selling off the UK retail arm earlier this year.

Following the acquisition, the new larger Group 1 UK business will have 128 new car sales points, up from Group 1’s current 55 points.

Inchcape’s UK retail group had a turnover of £2.07 billion in 2023 and an adjusted operating profit of £49m. An Inchcape spokesman said: “The gross assets of Inchcape’s UK Retail operations as at 31 December 2023 were £752m (including £183m of freehold property and £336m of inventory) and after deducting liabilities, the transaction is expected to result in a gain on disposal.”

Group 1 currently represents 15 brands in the UK and employs 3,300 people. Inchcape UK Retail currently employs 3,600 people.

Daryl Kenningham (pictured), president and CEO of Group 1 Automotive, said: “We are delighted to have reached an agreement to acquire Inchcape’s UK Retail operations, which we have long admired given the company’s reputation for exceptional customer service, attractive portfolio of OEM brand partners and high-quality management team. With our considerable automotive retail experience in the United States and the UK, we look forward to building on Inchcape’s strong industry relationships and leveraging our expertise to support our combined operations in their next phase of growth.”

Group 1’s senior vice president and CFO Daniel McHenry added: “While this transaction provides a transformation in scale for our company in the UK, our US credit facility pro-forma leverage ratio will be approximately 2.2x after taking into account the financing of this transaction with debt and cash on hand, and liquidity remains comfortably within our targets.”

Tags: Group 1, Inchcape

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