Marshall of Cambridge agrees £201.6m sale of Marshall Motor Holdings shareholding to Constellation Automotive Group
Marshall of Cambridge has agreed to sell its majority stake in Marshall Motor Holdings for £201.6million to Constellation Automotive Group.
Constellation, the biggest digital used car group in Europe, owns WeBuyAnyCar, BCA (British Car Auctions) and Cinch.
It has offered 400p per share to Marshall of Cambridge (MCH) for its 64.4 per cent shareholding in Marshall Motor Holdings (MMH), which has steadily grown through acquisitions in recent years under the stewardship of CEO Daksh Gupta.
The deal values MMH at £313million and represents a 41.3 per cent uplift on the company’s closing share price last Friday (November 25) of 283 pence per share.
It means the company has more than doubled its value since it was admitted to AIM on the London Stock Exchange in April 2015 at 149 pence per share, which valued it at £115million.
Announcement of the deal prompted MMH’s share price to rocket on Monday.
In a statement, Marshall of Cambridge (Holdings) Ltd said: “This was not an easy decision as MMH is the longest established business in MCH. However, whilst there remains a lot of support and admiration for MMH and the team, it has become increasingly clear that our strategic plans are taking different paths.
“As such, the MCH board therefore believes that the sale is in the best interests of MCH and its shareholders.”
Completion of the deal is expected to take three to four months.
Marshall Motor Group is the fifth largest motor dealer group in the UK, following its latest acquisition of Canterbury-headquartered Motorline Holdings Ltd and its subsidiaries for £64.5million.
It runs 164 franchise dealerships representing 27 different brand partners in 37 counties across England and Wales. It also operates 10 trade parts specialists, seven used car centres, six standalone body shops and one pre-delivery inspection centre.
Constellation, which was launched in 1946 as Southern Counties Car Auctions, has confirmed the formal offer under the Takeover Code. It is conditional on approval by the Financial Conduct Authority and will mean Marshall will cease to be a listed company.
Constellation’s subsidiary CAG Vega 2 Ltd, known as Bidco, will acquire the entire share capital of MMH.
It then plans a 12-month review of the business, including:
- reviewing Marshall's existing organisational structure, strategy, dealership portfolio, freehold estate, agreements with vehicle manufacturers and distributors, service offerings, markets, customers, and delivery;
- assessing the opportunities within Marshall's business to enhance the efficiency of business process and structures; and
- assessing the potential investment that will support Marshall’s future strategy.
The company said: “Bidco has no intention to make any changes to the conditions of employment or the balance of the skills and functions of Marshall employees or management. However, Bidco recognises the important contribution of all of Marshall's employees to what has been achieved by Marshall as a business.
“There may be some restructuring required following completion of the offer. In particular, once Marshall ceases to be a listed company, certain corporate and support functions relating to Marshall's status as a listed company may potentially require reductions in headcount.”
MCH confirmed an “irrevocable undertaking to accept the offer” that prevents it from selling any of its MMH shares and remains binding in the event of a competing offer.
The employment rights, including pension rights, of MMH employees will “be fully safeguarded in accordance with applicable law”, the companies said.
Bidco said it had “no plans to change the locations of Marshall's headquarters and headquarter functions”, aside from those relating to its listed status. And it said it had no plans to change its “places of business or to redeploy the fixed assets of Marshall”, although these will all form part of its review.
Marshall Motor Holdings has posted a string of exception results, beating the new and used car sale markets on a consistent basis.
It expects its revenues to soar past £3bn following the deal for Motorline. Last year, it recorded revenues of £2.15bn in spite of the pandemic.
The deal represents another major change at Marshall of Cambridge.
It has already announced plans to relocate Marshall Aerospace and Defence Group away from Cambridge Airport by the end of the decade. It intends to submit plans to move to Cranfield in Bedfordshire, where Cranfield University is developing its Air Park.
Marshall of Cambridge’s other business is Marshall Group Properties, which looks after its land, housing, commercial property and farming interests. It is involved in the development of Marleigh, the new community off Newmarket Road.
Following the death of Sir Michael Marshall in July 2019 and the departure of Robert Marshall from the board in August 2020, the one representative of the Marshall family on the board today is non-executive director Charlie Marshall, the great grandson of the Marshall Group founder, David Marshall.
He began Marshall of Cambridge on October 1, 1909, in a stable in Brunswick Gardens, Cambridge
The car hire and garage business was developed by his son, Sir Arthur Marshall (December 4, 1903-March 16, 2007), father of the Sir Michael, into the business that includes the world-leading aerospace engineering company, which he chaired from 1942-89.
Explaining the background to the deal, Constellation said: “The Constellation Group is focussed on broadening its offering for both consumers and business partners across the UK and Europe, and the potential acquisition of Marshall continues this strategy.
“In recent years, the Constellation Group has grown its B2B auction channels, including a move to online digital platforms, to provide the best choice of vehicles to trade buyers and liquidity and value to trade sellers.
“It also continues to develop its C2B channel, providing consumers with an efficient way to sell their car and making those cars available to trade buyers.
“It has continued to develop its B2C marketplace and associated preparation and logistics infrastructure to provide an efficient channel for trade partners to sell cars online to consumers in a number of countries.
“The group continues to look to develop, grow and embrace technology to ensure it can operate efficiently and effectively in order to provide the best range of services to its wide base of partners and customers.”
Constellation describes itself as “the largest vertically integrated digital used car marketplace in Europe”.