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Super Group expands in Western Cape with R1bn Mercedes-Benz deal

May 18 2016

​Transport and fleet management company Super Group has concluded a deal valued at almost R1bn to acquire Mercedes-Benz dealerships and property in the Western Cape. The net asset value of the transaction, which was subject to regulatory approval, was R880m-R900m, Super Group said on Tuesday.

Under the leadership of Peter Mountford, Super Group has pursued an aggressive acquisition strategy over the past six years, sweeping up assets in its core business — supply chain, fleet management and dealerships — in SA and offshore.​

In the 2015 financial year, the group concluded deals in the UK, Germany and Australia. The transactions bolstered profit as operating margins in the domestic logistics industry were squeezed by slow economic growth.​

The company spent more than R4bn last year acquiring Australian vehicle finance provider NCL and a controlling stake (75%) of German logistics firm IN tIME. It also scooped up 100% of the UK’s biggest Ford motor dealer for R606m.​

​The new deal would see Super Group take control of Sandown Motors for R492m-R512m in cash, which amounted to a price-earnings multiple of between 8.3 and 8.7 times, the company said. Sandown Motors is a subsidiary of Mercedes-Benz.

​Sandown operates five Mercedes-Benz motor passenger vehicle dealerships, three Mercedes-Benz, Freightliner and Fuso commercial vehicle dealerships, and one Fiat and Chrysler motor dealership. The dealerships are in Cape Town, Stellenbosch, Paarl and Worcester.

Super Group said it would buy the property at Century City from which Sandown Motors operated one of the dealerships, for R200m. In addition to the dealerships and the property, Super Group said it would purchase vehicle inventory estimated at R580m, which would be financed by a primary facility from Mercedes-Benz Financial Services SA and a secondary facility from WesBank, a division of First Rand Bank.​

“The acquisition of (Sandown Motors and the property) is in line with (our stated) strategy and represents an opportunity for the group to build a dealership footprint in the second-largest car market in SA.”​

​Super Group had a policy of owning dealership properties in strategic locations in SA, the company said. The company hopes to wrap up the deal by September.

The share price dropped 1.42% to R39.50 on Tuesday. Super Group’s share price has soared 521% in the past five years and its market value has swollen to R14.18bn.​

The JSE’s industrials index has ascended 197% in the same period, while the share price of larger transport and logistics company Imperial, whose market cap is almost double Super Group’s, has gained 36.61% since 2010.

Source: Business Day BDlive