Automotive and leisure products retailer Halfords Group plc (HFD.L) Thursday announced the acquisition of car servicing and repair operator Nationwide Autocentres for a cash consideration of GBP 73.2 million. Halfords has funded the deal from its existing resources and expects the acquisition to further extend its presence in the UK car maintenance market.
The company also said its trading performance remains on track to deliver current year profit before tax, excluding the post acquisition results from Nationwide, in line with market view.
Nationwide acquisition is looked up on by Halfords as a step to build on its retail position in car maintenance to expand into the UK's GBP 9 billion car servicing and repair market.
Following the acquisition, Nationwide, which operates through 224 outlets nationally, would be re-branded as Halfords Autocentres. Halfords is planning to roll-out a further 200 centres, creating over 1,000 new jobs.
The group also intends to open at least 200 additional centres in the coming years. Further growth opportunities are anticipated from cross-marketing of the group's complementary customer base. Cost and purchasing synergies are also anticipated.
The company anticipates re-branded Halfords Autocentre business to double EBIT to approximately GBP 20 million in its third year of ownership and expects the acquisition to increase earnings per share by 6% in its first full financial year.
David Wild, Chief Executive of Halfords said, "Car maintenance is a large and highly attractive sector where there is increasing demand from motorists for reliable service at affordable prices. Nationwide is a high quality business and represents an opportunity for significant growth."
Further, Halfords said that its trading performance since 14 January 2010 has been in line with internal forecasts and it remains on track to deliver current year profit before tax, excluding the post acquisition results from Nationwide, in line with market expectations.
HFD.L is currently trading at 410.50 pence per share, up 18.80 pence or 4.80% on the London Stock Exchange.
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