Halfords acquires LTC Trading and Lodge Tyre subsidiary
Motoring and cycling products retailer Halfords has acquired LTC Trading Holdings and its Lodge Tyre subsidiary in a deal valued at as much as £37.2m.
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Halfords will make a total consideration for LTC of £33.2m, due on completion, with a further £4.0m to be in the 2025 trading year, subject to performance.
The London-listed group said the acquisition will take its garage services business to 656 garages, 253 consumer vans, 440 commercial vans and nine warehouses.
Halfords also highlighted that the acquisition was both "strategically and financially compelling", delivering on its objective of further evolving into a business more heavily weighted towards motoring services - with services revenue set to account for roughly 48% of group revenues following completion.
Lodge Tyre generated pro forma EBITDA of £4.7m on a pre-IFRS 16 basis in the year ended 31 March 2021.
Chief executive Graham Stapleton said: "The acquisition of Lodge Tyre is yet another example of Halfords' strategic aim of becoming a motoring services-focused business, and will mean that motoring accounts for over three-quarters of our total revenue.
"The current trading environment reinforces the rationale for building ever-more resilient, needs-based revenue streams, which is exactly what the motoring category offers. Within that, the nature of the commercial tyre market means that it is non-discretionary and therefore extremely well insulated against macroeconomic uncertainty."
Reporting by Iain Gilbert at Sharecast.com