Shares in car dealer Inchcape PLC (LON:INCH) drove higher today on news the firm has expanded its presence in South America with the acquisition of a distribution business focused on Subaru cars for £234mln in cash.
The company was the top FTSE 250 gainer, up over 5%, or 36.5p at 678.5p in early morning trade.
Inchcape said the deal with Indumotora - covering Chile, Colombia, Peru and Argentina, and including Hino commercial vehicles – will strengthen its existing operations in the region and offers attractive growth prospects.
Stefan Bomhard, Inchcape’s group CEO, said: “The acquisition of a scale Distribution platform in South America is a compelling strategic and financial opportunity for Inchcape, consistent with our Ignite strategy.”
He added: “The deal creates a scale South American Distribution platform for Inchcape partnering with strong brands to drive long-term value creation."
Inchcape said a number of Indumotora's other distribution relationships were included within the acquisition, including Suzuki in Argentina and commercial vehicles brand DFSK in Chile, Peru and Colombia, while Indumotora will retain its Kia business in Chile.
For the current calendar year, Inchcape said the business being acquired generated revenues of £382mln and had adjusted underlying earnings (EBITDA) of £27mln.
Inchcape has been a distributor in South America for over 30 years and said the deal would provide strong complementary brand partners to its existing BMW presence in Chile and Peru.