ACQUISITION
SA’s Motus buys UK car dealer for R493m
Not everyone is happy — a fund manager has warned the deal to buy Pentagon Motor may dent Motus’s margins
Imperial Holdings has bought UK automotive dealer Pentagon Motor Holdings for R493m cash through its Motus automotive division. "This … is consistent with Motus’s strategy to deploy capital and its vehicle retail expertise in pursuit of growth and returns beyond SA," Motus CEO Osman Arbee said on Tuesday. But not everyone appears happy with the deal. "While it seems to be change from Motus’s initial strategy of focusing on SA, we think the acquisition is largely indifferent for the group," said Damon Buss of Electus Fund Managers. "It is likely to be margin dilutive for Motus, as UK dealerships generally achieve lower margins than SA dealerships. However, Motus could earn a reasonable return on investment if they funded the acquisition with the cheap debt available in the UK," he said. Buss said the UK was a tough market in which to operate, especially in light of Brexit uncertainties and car sales declining 2.2% in 2017 to date. The automotive dealership model was similar to the So...
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