Marshall Motors sees significant value in Ridgeway acquisition

Marshall Motor Holdings' shares are up more than 20% after it acquired Ridgeway Garages (Newbury) Ltd for £106.9m cash.

Directors expected the deal to deliver significant earnings enhancement and returns materially greater than Marshall Motor's weighted average cost of capital, it said. The deal makes it the seventh-largest UK motor dealership, moving up from tenth.

Ridgeway is a multi-franchise dealer group operating across the southern home counties of England, Wiltshire and Dorset, representing 12 brands via 30 franchised dealerships.

The acquisition would be funded from Marshall's existing resources.

Ridgeway's consolidated FY15 revenues were £722.6m, while adjusted EBITDA was £20.2m.