motoring special 35 Automotive acquisitions: speaking your language
Automotive specialist legal adviser Pitmans LLP has led on some of the major deals over the past few years and acts for the highly successful and ever-acquisitive Ridgeway Group
As such, the Pitmans team understand the steps and challenges investors face in the sector while providing the blend of expertise to smooth the process for all involved. The effective acquisition of a dealership involves an experienced team, one that recognises the specific Corporate, Pensions, Property, Employment and other practical issues that can impact on a deal. Here’s a brief guide to help you consider some of the key steps
Corporate
The buyer will need to enter into a new dealer agreement with the franchisor simultaneously with acquiring the dealership. Funding will need to be available for drawdown on completion.
Due diligence will need to be undertaken on the assets to be acquired and any liabilities being assumed by the buyer. While the purchase price for goodwill will usually be agreed in advance, the
purchase price for other assets will not be ascertainable until the date of sale when valuations can be conducted and agreed for fixed assets, vehicles, stock and work in progress.
Apportionments will also need to be agreed at or shortly after completion. In addition to the usual periodical payments relating to the premises and employee salaries, accrued commissions, bonuses, holiday pay and holiday entitlement should all be taken into account.
Brand protection and business continuity are key to the process. Telephone systems, emails and website enquires will all need to be transferred effectively. Data protection issues for customer and employee data need documenting.
The buyer will want to take the benefit of customer orders and deposits paid in advance for vehicles. Any offers for free services or free MOTs offered to customers which will affect future business will need investigation and
liability under customer warranty claims will need to be agreed.
Supplier contracts should be reviewed and depending upon their importance to the business may need to be formally assigned or novated.
Pensions
Due diligence should be undertaken to assess what arrangements exist for employees’ pensions. This may identify whether a defined benefit scheme is in place and if so this will have a considerable impact on the terms of any acquisition.
Property
The property aspects of acquiring a dealership can be complex depending upon whether the premises are freehold or leasehold or a combination of the two. Landlord’s licence to assign will be required for leasehold sites and this can affect the timing of the transaction.
Environmental issues are of particular concern due to the inherent nature of the sites, particularly where workshops and body repair services are also offered at the premises.
Unbelievable value – from Ridgeway Volkswagen Newbury
Passat CC – from £259 per month Passat – from £249 per month
The best fleet vehicles, the best fleet sales offers and the best all-round fleet expertise: you’ll find it all at Ridgeway Volkswagen Newbury. As Business Sales Specialists, we’re approved supplier’s to the industries leading Contract Hire and Leasing Companies and pride ourselves on providing the highest levels of customer service.
To take advantage of the offers above or for more information, contact our Business Sales Specialists on 01635 264013, John Street 07879 686999 or Richard Kershaw 07557 284380 or email us at
vw.fleet@ridgeway.co.uk
Ridgeway Volkswagen Newbury
Newbury Motor Park, Pinchington Lane, Newbury, Berkshire RG14 7HT. 01635 40678
@ridgewayvw
www.ridgeway.volkswagen.co.uk /ridgewayvw
Business users only. Monthly rental prices do not include VAT or initial rental. 6.0p per mile (plus VAT) charges for mileage travelled in excess of the contracted mileage. Terms and conditions apply. Further charges may be payable on vehicle’s return. Indemnities may be required. Subject to status. Offer available on orders before March 31st, 2014. Subject to availability. Certain vehicles excluded. Ask for details. Volkswagen Finance, Freepost VWFS. Images used for illustration purposes only. Finance providers may pay us for introducing you to them. We can introduce you to a limited number of lenders to assist with your purchase, who may pay us for introducing you to them. Standard EU Test figures for comparative purposes and may not reflect real driving results. Official fuel consumption figures for the Volkswagen model range in mpg (litres/100km): urban 23.7 (11.9) – 74.3 (3.8); extra urban 35.8 (7.9) – 94.2 (3.0); combined 31.0 (9.1) – 88.3 (3.2). Combined CO2 emissions 239 – 85g/km.
W06 Ridgeway VW fleet sales ad 133x187 (B_Mag).indd 1 THE BUSINESS MAGAZINE – THAMES VALLEY – MARCH 2014
www.businessmag.co.uk 07/02/2014 16:38
MOTORTRADER INDUSTRY AWARDS 2012
WINNER Employment
Significant employee due diligence will need to be undertaken in relation to contracts transferring to the buyer under TUPE.
Ridgeway Group
The Ridgeway Group was founded in 1997 and today has an annual turnover of over £550 million. Ranked as a top 20 largest motor retail group in the UK, Ridgeway has recently added a third Skoda dealership, a Mercedes-Benz deadlership in Chichester, the Land Rover and Jaguar franchises in Oxford, a new site in Milton Keynes and the purchase of land to house a new Audi dealership in Oxford.
If you would like to discuss your legal needs with our automotive specialists see details below.
Details: Automotive team 0118-9580224
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48