Halfords Group PLC (LON:HFD) has strengthened its network of automotive services outlets with a £15mln acquisition of Universal Tyre and Autocentres.
Universal, which add 20 garages and 89 vans to the Halfords Autocentres network in the Kent region, is profitable and is expected to report revenue of at least £31mln and underlying profits (EBITDA) above £1.5mln for the last calendar year.
The FTSE-listed cycling and motor accessories retailer said the deal meant it now has 374 garages as it moves towards its stated target of topping 550.
Of the £15mln purchase price, £6mln related to the underlying trading business, with Halfords management intending to recoup the remaining amount paid for the property via sale and lease-back deals in the next few months.
“We have a clearly stated strategy of building a market-leading motoring services offer, and the acquisition of Universal is another important step forward in helping us to achieve that goal,” said chief executive Graham Stapleton.
“We continue to see strong demand for our Autocentres, for our expanding fleet of Halfords Mobile Expert vans, and for our growing commercial business. Universal will help us to meet that demand whilst also expanding our geographic footprint in a market for which we see significant potential."
This acquisition comes over a year since the group’s last purchases, of McConechy's and Tyres on the Drive in 2019.
Stockbroker Peel Hunt said with Univeral being profitable and offering synergies, “the deal should wash its face very quickly but it is small on a group scale”.
“We expect to see further deals of this ilk in the future as AC moves towards its target of 550 sites in the UK.
“We continue to believe that Halfords is undervalued on a low double-digit PE: we remain firm buyers.”