Car dealership looks for growth after refinancing deal

One of the UK’s largest car dealerships, Lookers, is planning expansion following a £200m (€294m) refinancing deal with the Bank of Ireland announced today.

It is a move which could make it safer from the threat of the kind of hostile takeover it faced earlier this year from the UK’s biggest dealership.

The bank has been appointed joint lead arranger in a funding package with the owners of the Charles Hurst group in the North.

The fundraising exercise will enable Lookers to refinance existing debt and provide funds for future acquisitions.

Lookers, headquartered in Manchester, employs 5,000 staff and has 100 car dealerships across the UK.

Founded in 1908 and floated on the stock exchange in 1973, it is now the second largest car dealership in the nation with a capitalisation of £300m (€441m).

Charles Hurst employs 800 people in the North and contributes £350m (€515m) of the group’s £1.5bn (€2.2bn) turnover.

Commenting on the financing package Stephen Kirkpatrick, head of banking at Bank of Ireland, said: “Lookers has agreed a funding structure that allows it to pursue more active growth and acquisition strategies.

“Bank of Ireland is pleased to help fund its expansion programme. The company’s strong position in the market, its robust business model and experienced management team mean it has excellent growth prospects.”

Lookers has been growing through both organic growth and acquisitions. However in January it was pipped at the post in its attempts to acquire the Reg Vardy dealership by rival Pendragon, the UK’s biggest dealership.

A month later Lookers became an acquisition target for Pendragon but successfully fought off a hostile takeover bid.