UK auto parts and accessories and vehicle servicing chain Halfords is expanding its operations further into the car servicing and repair industry with the acquisition of Nationwide Autocentres, in a deal worth GBP73.2m.
The move is said to have created the largest UK operator with a specialised focus on the car parts, servicing and repair market. Halfords is also one of the UK’s largest retailers of bicycles.
The deal will include 224 Nationwide outlets nationally. Following the acquisition, Nationwide will be re-branded as Halfords Autocentres. Halfords is then planning to roll-out a further 200 centres, creating over 1,000 jobs.
Nationwide Autocentres increased its network significantly early in 2003 following the purchase of sites from fast fit chain Kwik Fit which, in turn, had been owned for a time by Ford. The Nationwide move was part of the firm’s drive for fleet business at the time.
Analysts have largely been complimentary of Halfords’ acquisition, suggesting it would offer the group an alternative source for growth as the average age of cars on the UK’s roads continued to increase.
Nationwide’s EBITDA has grown by 70% over the past four years and in the year ended 31 December 2009 is expected to be GBP10.1m from revenues of GBP97.0m.
The company expects the re-branded Halfords Autocentre business to double EBIT to around GBP20m in its third year of ownership and is expected to increase earnings per share by close to 6% in its first full financial year within the group.
The acquisition, completed on a debt-free basis, has been funded from Halford’s existing resources.
Halfords CEO David Wild said: “Our expansion into the adjacent car servicing and repair market is an exciting and logical move for Halfords. Car maintenance is a large and highly attractive sector where there is increasing demand from motorists for reliable service at affordable prices. Nationwide is a high quality business and represents an opportunity for significant growth.
“We have grown strongly in this market through the provision of expert advice and our ‘we fit’ services, and Halfords Autocentres will complement our retail business closely. Customers trust the Halfords brand and we are sure that a national chain offering great service and MOTs at fair prices will be both popular and successful.”
Halford’s added that its current trading performance had been in line with internal forecasts and that it remained on track to deliver current year profit before tax, excluding the post acquisition results from Nationwide, in line with market expectations.