Motorcycle retailer snapped up for $123.2 million
Publicly listed motorcycle dealership MotorCycle Holdings is preparing to expand its retail business, having announced the acquisition of accessories and part business Cassons for $123.2 million on Wednesday.
MTO, which oversees 24 franchised dealerships in Australia, will pay previous owners the Cassen family just under $100 million in cash for the business, which it is undertaking fundraising on the market to facilitate.
Cassons operates eight retail stores in NSW and Victoria under the Motorcycle Accessories Supermarket brand, as well as an online store, generating $76.5 million in revenue from total operations in FY17.
It sells motorcycle parts from exclusive brands such as Arai and Metzeler, as well as accessories like helmets, jackets and boots from house brands like RJays.
MTO managing director and founder David Ahmet said the purchase of Cassons “made strategic sense”.
“[The acquisition] increases the scale of MTO’s existing retail accessory business, expands our distribution network and provides opportunities to improve margin by sourcing additional Casson product for retailing through the MTO dealer network,” he said.
“In addition, MTO continues to explore other motorcycle franchise acquisition opportunities to increase its market share and geographic coverage in Australia.”
Cassons will boost MTO’s revenues by more than 30 per cent to approximately $310 million, while EBITDA is set to double to $30 million, the company said.
MTO plans to continue the roll-out of its newly acquired retail brand, which could include the opening of new stores as well as enhancing online sales.
MTO already maintains dealership locations throughout Queensland, New South Wales and the ACT.
Cassons principals Rob and John Cassen will take senior executive positions in the new business.
MTO shares were up 13.48 per cent to $4.80 by early afternoon trading in the wake of the announcement.
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