Halfords Group PLC (LSE:HFD) said it acquired LTC Trading Holdings and its subsidiary, Lodge Tyre Company, in a deal worth up to £37.2mln as it pivots more towards motoring services.
It will pay £33.2mln upon completion, said the motoring and cycling specialist, with a further £4mln payable in 2025 subject to performance.
"The acquisition of Lodge Tyre is yet another example of Halfords’ strategic aim of becoming a motoring services-focused business and will mean that motoring accounts for over three quarters of our total revenue,” said chief executive Graham Stapleton.
A statement added that the directors of Halfords believe the “acquisition is both strategically and financially compelling”.
The acquisition takes Halfords garage service business to 656 garages, 253 consumer vans, 440 commercial vans and nine warehouses.
Lodge Tyre provides business-to-business automotive services and Halfords believe the deal will be earnings per share accretive in the first year, returning an internal rate of return that exceeds the group weighted average cost of capital.
“The current trading environment reinforces the rationale for building ever-more resilient, needs-based revenue streams, which is exactly what the motoring category offers,” Stapleton added.