(Reuters) – Halfords Group Plc said it would buy Axle Group, the owner of the National tyre servicing brand, for 62 million pounds ($82.54 million) as the cycle retailer shifts focus to its motoring services business.
The debt-free deal will help Britain’s biggest motoring and cycling products and services provider expand its network to 1,400 locations.
The company, which has benefited from a surge in cycling during the COVID-19 pandemic, said on Wednesday it intended to partially fund the purchase by raising about 64 million pounds through an issue of shares, a subscription and a retail offer.
“It (the acquisition) will also see us deliver on our established strategy of evolving Halfords to become a motoring services-focused business,” Chief Executive Officer Graham Stapleton said in a statement.
Motoring revenue is set to account for more than 70% of the company’s revenue after the deal, he added.
National, a well-established name in the tyre and automotive maintenance and repair business, operates under three brands – National Tyres and Autocare, Viking Wholesale Tyres and Tyre Shopper.
The acquisition is Halfords’ fourth purchase of similar businesses in three years after it bought McConechy’s, Tyres on the Drive and Universal.
Halfords said the deal was expected to add 18 million pounds to its annual core profit by the fifth year after the deal’s close.
(This story corrects to remove reference to the number of garages in paragraph 2)
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Amy Caren Daniel and Aditya Soni)