KPMG Corporate Finance is delighted to announce that it has acted for Marshall of Cambridge (Holdings) Limited (“Group”) on the IPO of its subsidiary, Marshall Motor Holdings plc (“Marshall Motors”) for £115 million, led by Frank Carter and Simon Heath.
Marshall Motors is the tenth largest dealership in the UK and was the second largest privately owned dealership prior to flotation, operating 71 franchises across 63 sites nationally. Uniquely, Marshall Motors is the only UK dealership group to represent all top 10 volume and top 5 premium brands (Audi, BMW, Mercedes-Benz, Land Rover & Jaguar).
Under the stewardship of Daksh Gupta, CEO, Marshall Motors has grown from £417 million revenue in 2008 to in excess of £1.1 billion in 2014. Post-IPO, Group continues to be the majority shareholder of Marshall Motors and is supportive of the M&A growth strategy which has presented historical success.
Simon Heath, KPMG’s automotive M&A specialist commented:
“The franchised dealership model continues to evolve with manufacturers requiring upscaling of the customer experience. This process has led to consolidation in the sector as capex requirements increase for high-end dealerships. The IPO of Marshall Motors has capitalised the business for growth and to accelerate its successful M&A strategy in a consolidating market. Marshall Motors has refocused its business towards the premium end of the market since 2008, which continues to be the most desirable segment of the market.”
The new car market continues to perform well with February 2015 new registrations up 12% year-on-year, the 36th consecutive month of growth in the UK. Expectations for 2015 are for new vehicle registrations to be in excess of 2.5 million units in the UK and ahead of pre-recession levels.
The fastest growth was experienced in the fleet market which enjoyed a 19.9% increase in the period. In the used car market, the car parc (number of cars and other vehicles in a region or market) continues to age increasing to 7.7 years in 2013 compared to 6.7 years in 2004. However, as the volume of new vehicles come to market, typically after three years, there may be pressure on residual values. This presents a challenge that dealerships will need to manage through lower stock levels or high stock turn in the next 48 months.
John Leech, Head of Automotive at KPMG added:
“Current trends in digital retailing, manufacturer-backed finance arrangements and connected vehicles are continuing to favour franchised dealers and investors have unsurprisingly snapped up Marshall’s shares. I expect further mergers and acquisitions in the franchised dealer sector over the coming months.”