STOBART Group, the logistics and property company best known for its green and white lorries and smartly dressed drivers, has agreed a £12.4 million deal to buy automotive logistics company Auto Logic.
The deal enables Stobart and its brand to enter the car transportation and vehicle services markets with immediate critical mass.
AutoLogic, which transports vehicles nationwide on behalf of motor manufacturers and a number of major vehicle operators, has struggled of late and has seen its share price slump to 11.5p (May 23 – the last business day prior to the commencement of the offer period).
Stobart says the offer price will not be increased and that the acquisition will be funded through its existing cash resources.
Stobart has announced the proposed acquisition after claiming to have received irrevocable undertakings totalling 51% of the shareholding in AutoLogic from major investors and letters of intent to back the purchase from investors owning more than 10% of shares.
Stobart says that AutoLogic will benefit from its buying power in relation to new vehicles, maintenance, tyre and parts supplies and insurance.
In addition, the Stobart directors believe that there are opportunities for Autologic to expand further into the European market, where the Stobart Group has a growing presence.
Stobart also believe that there are a number of strategic opportunities that will arise following the acquisition.
The car transportation sector suffers from significant levels of one-way traffic flow of cars from the main ports to dealerships, with resultant empty running on the return leg.
The Stobart directors believe that the ability of Autologic to use the Stobart Rail infrastructure would reduce the level of ‘empty running’ and derive key operating and environmental benefits as a result.
In addition, Autologic should be able to benefit from the Stobart Group’s significant storage sites both in terms of car storage and also overnight truck parking.
Andrew Tinkler, chief executive of Stobart, said: ‘AutoLogic is an excellent fit with our group strategy to expand into complementary service offerings and it will facilitate our entry into the auto logistics market in a leading position.
‘We expect to be able to drive substantial synergies and efficiencies from improved fleet utilisation, vehicle buying and maintenance, which will benefit our customers and drive value for our shareholders. We also see opportunities to expand AutoLogic’s presence inEuropewhere we have a growing presence.’
Avril Palmer-Baunack, chief executive of AutoLogic, said: ‘The combination of Stobart and AutoLogic will further strengthen AutoLogic’s market-leading position in the automotive marketplace.
‘It will enable us to provide new, flexible and innovative solutions to our customer base, whilst also giving us the opportunity to improve competitiveness as a result of being part of a bigger business.’