Allan Otley sells AM100’s Cars2 to its workers, stays in put up
Yorkshire-based AM100 dealership group Cars2 has been bought by its shareholders to an Worker Possession Belief (EOT).
Cars2 operates from 17 websites, retailing new and used autos from manufacturers together with Hyundai, Nissan, Renault, MG, Dacia and Seat, in addition to Chinese language producers Omoda and Jaecoo. Alongside this, the corporate operates a status used automobile dealership, stocking premium used automobiles, together with McLaren, Ferrari, Bentley and Porsche.
An EOT permits firm house owners to promote half or all of their enterprise, freed from capital features tax, to their workers, with out requiring any adjustments to the administration construction, as the customer is usually a trustee performing within the curiosity of all workers.
Yorkshire-based AM100 dealership group Cars2 has been bought by its shareholders to an Worker Possession Belief (EOT).
Cars2 operates from 17 websites, retailing new and used autos from manufacturers together with Hyundai, Nissan, Renault, MG, Dacia and Seat, in addition to Chinese language producers Omoda and Jaecoo. Alongside this, the corporate operates a status used automobile dealership, stocking premium used automobiles, together with McLaren, Ferrari, Bentley and Porsche.
An EOT permits firm house owners to promote half or all of their enterprise, freed from capital features tax, to their workers, with out requiring any adjustments to the administration construction, as the customer is usually a trustee performing within the curiosity of all workers.
This enterprise construction permits workers to collectively have a controlling curiosity within the enterprise though they don’t take direct possession of any shares as they’re beneficiaries of the belief. As soon as an organization is owned by an EOT, it could possibly pay annual bonuses to its workers freed from earnings tax.
Two important circumstances allow the tax breaks – the belief should maintain greater than 50% of the shares within the firm, and if workers obtain any profit from the belief they have to all be included and on the identical phrases.
Following completion of the sale for an undisclosed sum, founding proprietor Allan Otley will stay as chief govt, alongside the remainder of his senior administration workforce which will stay in put up to supervise the corporate via the following stage of its development.
Otley stated: “I’m thrilled to have the ability to go on the success of Cars2 to the workers, and to see them rewarded for his or her efforts in driving the enterprise ahead.”
Now using greater than 250 workers, Cars2 has expanded considerably since Otley began the enterprise in 2006 as a single website used automobile enterprise.
From the beginning, Otley’s imaginative and prescient was to create a small group of franchised automobile dealerships, inside an hour’s drive of each other, which might keep a 3% RoS.
In 2007, he realised his plan so as to add a franchised website when he acquired Citroën in Keighley, earlier than promoting that location 5 years later because the group regarded to ascertain a extra compact market space.
Cars2’s breakthrough got here in 2008, when it joined the Hyundai franchise. The model was about to embrace the Authorities’s automobile scrappage scheme which took its registrations from 28,000 in 2008 to 56,000 in 2009 and revenues from £3.3m to £13.8m inside three years.
In 2011, Cars2 added Hyundai Bradford to the portfolio after it acquired a former Audi website within the metropolis to create a ‘flagship’ facility for the South Korean model, earlier than buying the Barnsley Peugeot franchise from Harratts in December of the identical yr.
Cars2 went on to put in Fiat/Abarth and Renault/Dacia in a multi-brand website on the positioning of that Peugeot franchise, after the group determined to finish its relationship with the PSA Group model.
Car2’s success was evidenced by the bid in late 2022 by Scottish automobile retail big Arnold Clark to accumulate the enterprise which had damaged into the AM100 rankings that yr because the 99th largest UK dealership ranked by turnover. Negotiations between the 2 companies nevertheless failed when the 2 events couldn’t agree monetary phrases. The enterprise has since risen to 96th place on this yr’s AM100 ratings.
In an AM seller profile interview, Otley described the way it had taken over a decade to rework what was a solus unbiased used automobile forecourt on Pontefract Highway, Barnsley, right into a cash-rich franchised retail group with aspirations of changing into a £250m turnover enterprise whereas sustaining its return-on-sales (RoS) determine of greater than 3%.
Cars2 joins franchised automobile retail enterprise West-Yorkshire based mostly Peter Ambrose Peugeot and AM100 franchised seller Glyn Hopkin Group as an EOT.
Founder and managing director Peter Ambrose additionally remained in place as a part of a 2022 handover technique of the £25 million turnover enterprise to the newly-formed Peter Ambrose (Castleford) Trustee operation.
Glyn Hopkin Group stated its 2024 acquisition by an EOT ensured that the group might proceed its development technique, safeguarding the model’s legacy, ethos, and core values, whereas additionally securing a easy succession plan with out altering the management workforce
Josh Stokes from Yorkshire-based Fort Sq.’s Company Finance workforce suggested Cars2 on transaction worth, structuring, producer approval and the fundraising course of.
Authorized recommendation was supplied by Lisa Wallis and Ellie Davies, whereas Alex Angelides and Adrian Hackett, all from the Sheffield workplace of legislation agency Freeths, suggested on tax. Sam Drummond, from the Barclays Retail & Wholesale workforce, labored to offer funding on behalf of the financial institution.
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