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MotorCycle dealership to buy retailer

AAP  |  04 Oct 2017Text size  Decrease  Increase  |  
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BRISBANE - [AAP] MotorCycle Holdings (ASX: MTO), one of Australia's largest motorbike dealership operators, is set to buy an accessories and parts retailer for $123.2 million.

The company on Wednesday said the acquisition is expected to increase its annual revenues by about 30 per cent to $310 million, and double earnings to $30 million.

ASX-listed MotorCycle Holdings said the Cassons' retail and wholesale business will increase the group's existing retail accessory business and expand its distribution network.

Cassons principals Rob and John Cassen will take up senior executive positions with MotorCycle, with the former joining the board.

Cassons has eight retail outlets under the name Motorcycle Accessories Supermarket in NSW and Victoria, as well as online, and sells helmets, boots, gloves, and bike parts.

MotorCycle managing director and founder David Ahmet said the acquisition made strategic sense.

"We believe that the combination of the two businesses will also present significant growth opportunities, by introducing used motorcycles and other services into the growing Cassons retail network," he said.

He said the group continues to explore other motorcycle franchise acquisition opportunities to increase its market share.

The company will pay $98.7 million in cash and $24.5 million in shares, with the cash component to be funded through debt and a fully underwritten renounceable entitlement offer to raise $67 million at $3.85 per share.

Shares in MotorCycle were up 5.2 per cent, or 22 cents, at $4.45 by 1055 AEST.

The company listed on the share market in April 2016 at traded at $3.49 a share.

 

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