SG Fleet, a subsidiary of listed transport and logistics company Super Group, has acquired UK-based contract hire, short-term rental and fleet management services company Motiva for Â£12.4 million (R213.71 million) to establish itself in the top 20 in the UK market.
Chief executive Robbie Blau said on Wednesday the acquisition of Motiva complemented its current footprint in the UK and was an ideal fit for their growth strategy.
â€œI am delighted that we have been able to come to an agreement with Motiva. We will be targeting a seamless integration of the business, taking our UK presence to the next level. We now have the scale, the products and the expertise to establish ourselves firmly in this market.â€
Blau said Motiva would add further scale to their tool-of-trade offering as well as expertise in the specialist light commercial vehicle segment. It would also provide SG Fleet with a broader target customer base for its salary sacrifice products and gave them access to a broader panel of funders and funding structures.
â€œGiven the strong compatibility with our existing UK business, there are clear opportunities to extract revenue and cost synergies,â€ Blau said.
This acquisition follows that of Fleet Hire in August this year for Â£27.5 million and builds further on the profitable platform and critical mass created by combining SG Fleetâ€™s existing UK business and Fleet Hire, a contract hire, salary sacrifice, short-term rental and fleet management services company that employs 60 staff and has a fleet size of about 6,500 units.
These acquisitions are in line with Super Groupâ€™s strategy to expand its international footprint to buffer the company against the uncertain South African economy and emerging market turmoil. The group last year acquired a 75 percent equity interest in German niche logistics service provider IN tIME and 100 percent of novated and vehicle procurement specialist NLC in Australia.
Based in Stoke-on-Trent, Motiva has a staff of 50, a 4 300-unit fleet currently under management and generated normalised profit before tax of Â£1.75m in its last financial year.
Key members of Motivaâ€™s management team will be retained by SG Fleet to add further strength and knowledge to its UK team.SG Fleet expects cash earnings a share accretion, including synergies, in its first full year of ownership of 3.5 percent.
The purchase consideration will be settled by the issue of shares to the value of Â£1.125 million to the vendors, with Â£7.4 million of the remainder funded through debt and Â£3.9 million from cash on hand. This values Motiva at 7.1-times normalised profit before tax.
Blau added the integration of Fleet Hire was on track and no time had been wasted in bringing the SG Fleet and Fleet Hire businesses together.
â€œThe teams are operating from a combined location and our systems integration is proceeding as planned.
We have made good progress with extracting the procurement and disposal benefits available to us. Most importantly, we have received a really positive response from our customers,â€ he said.