Alpha Auto to Acquire Lookers for Approximately $588 Million

Kuldeep Billan, the executive chairman of Alpha Auto, views the acquisition as a tremendous opportunity to expand into the United Kingdom for the foreseeable future.

In a statement, Billan expressed confidence in the combined company’s ability to navigate the rapidly changing UK auto retail market, which is embracing new distribution models. He emphasized the advantage of having geographically diversified operations and a focus on operational excellence.

This deal will instantaneously elevate the privately owned Canadian dealership group to a much larger scale.

Currently, Alpha Auto owns 10 new-vehicle dealerships in Canada and five in the US, along with two used-vehicle stores south of the border. Since its establishment in 2014, the company has become one of the largest Canadian auto retailers in terms of earnings.

Meanwhile, Lookers operates nearly 150 dealerships. Having entered the car sales industry in 1910 following several years as a bicycle retailer, Lookers represents 35 manufacturers across various vehicle segments, including new-vehicles, motorcycles, and light-duty commercial vehicles. In 2022, Lookers generated $5.4 billion in revenue and sold approximately 163,000 vehicles.

Headquartered in Altrincham, Greater Manchester, Lookers employs around 6,500 personnel.

One of the reasons for the acquisition is the belief that the combined entity will benefit from the wealth of experience possessed by both management teams. This will enable the group to successfully navigate the ongoing changes within the global auto industry.

“This merger will create a larger business, bringing together two successful companies with complementary OEM relationships and a robust platform to support future growth in the UK,” stated Lookers CEO Mark Raban.

A shareholder vote is required for the deal to be finalized, although it has already received significant support.

Shareholders representing 42.1 percent of Lookers’ shares have committed to backing the acquisition through “irrevocable undertakings and letters of intent.”

The board of directors at Lookers has unanimously recommended that the company’s shareholders approve the takeover, which offers investors a 35 percent premium on shares based on the company’s closing price on June 19.

The deal is expected to be completed in either the third or fourth quarter of this year.

 

Reference

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