News | December 22, 2016

Strategic Distribution Acquisition in South America

Strategic distribution acquisition in South America

In new and existing growth markets

Inchcape plc (“Inchcape” or the “Group”)1, the leading independent multi-brand Automotive Distributor and Retailer with global scale, is pleased to announce the acquisition of a multi-country scale Distribution business in South America, focused on Subaru and Hino, from subsidiaries and affiliates of Empresas Indumotora S.A. (“Indumotora”).

The total cash consideration, on a cash-free and debt-free basis, is £234m, which represents 8.6x adjusted EBITDA of £27m on a revenue of £382m anticipated for the 12 months to 31 December 20162. The acquisition was signed and completed on 22 December 2016.

Transaction highlights:

Compelling strategic rationale:

  • Creation of a scale Distribution platform across South America with attractive growth prospects
  • Investing in existing markets of Chile and Peru and new markets of Colombia and Argentina
  • Inchcape becomes the leading South American Distribution partner for Subaru
  • Attractive commercial vehicle operation focused on Hino, an existing brand partner
  • Strong complementary brand partners to our existing BMW presence in Chile and Peru

Strong financial rationale:

  • Accretive to earnings in Year 1, by mid to high single digit percentage, enhances Group operating margin
  • Cash consideration of £234m represents 8.6x multiple of forecast 2016 adjusted EBITDA2
  • Cash generative Distribution business with low capital intensity
  • Funded from cash and committed debt facilities, retain strong Group balance sheet

The acquired business is a high-quality South American Automotive Distribution operation in the growth markets of Chile, Colombia, Peru and Argentina. Indumotora was created in 1922 and has been grown into one of the leading Distribution operations in South America by the Avayú family. It has long-standing operations with Subaru and commercial vehicle brand Hino, with relationships dating from 1977.

Included within the acquisition are a number of Indumotora’s other Distribution relationships, including Suzuki in Argentina and commercial vehicle brand DFSK in Chile, Peru and Colombia. Indumotora will retain the Kia franchise, and associated Retail sites, in Chile.

Inchcape is highly experienced in the region, having operated as an Automotive Distributor in South America for over 30 years. The Group already has successful long-term partnerships with Subaru in Australia and New Zealand and with Hino in Hong Kong, Macau, Singapore and Ethiopia, that began in 1992 and 1968 respectively.

Investing to Accelerate Growth:

The acquisition of a scale Distribution platform in South America is a demonstration of our Ignite strategy in action.

This transaction will create a scale position for Inchcape in South America with a strong and balanced brand partner set, including BMW, Subaru and Hino, providing a stronger platform to benefit from the long-term growth opportunities across the continent. Across these four markets an expanding middle-class with greater purchasing power and better access to credit underpins the structural growth opportunity from increasing levels of vehicle ownership.

The acquisition of these Distribution businesses, which also operate part of the associated retail network, further increases the contribution of this attractive channel to Group profitability.

The acquisition adds to the Group a high-quality and experienced management team.

Stefan Bomhard, Group CEO of Inchcape plc, commented:

“The acquisition of a scale Distribution platform in South America is a compelling strategic and financial opportunity for Inchcape, consistent with our Ignite strategy.

The business is recognised as a high-quality operator, with a culture of customer service excellence, consistent with ours and I am very pleased to welcome Indumotora employees into Inchcape.

I am delighted to further enhance our strong relationship with Subaru and Hino, two of our longstanding partners, and build on our strategic objective of becoming the OEM’s partner of choice. The deal creates a scale South American Distribution platform for Inchcape partnering with strong brands to drive long-term value creation.”

Market abuse regulation statement

This announcement contains inside information.

Conference call and webcast

Group Chief Executive Officer, Stefan Bomhard, Chief Financial Officer, Richard Howes and Chief Development Officer, Bertrand Mallet, will host a live audiocast for analysts and investors at 8.30am GMT today, 22 December.

Call dial in numbers:

Standard International Access: +44 (0) 203 003 2666
UK Toll Free: 0808 109 0700
Reference: Inchcape

Link for the audiocast & slides:

These details can also be found at together with presentation slides and a copy of this announcement. A recording of the audiocast will be available later in the day.


Group Communications, Inchcape plc
+44 (0) 20 7546 0022

Investor Relations, Inchcape plc
+44 (0) 20 7546 8359

FTI Consulting
(Jonathon Brill/Edward Westropp)
+44 (0) 20 3727 1000

Financial advisers

Greenhill & Co. International LLP and HSBC Bank plc, which are authorised and regulated in the United Kingdom by the Financial Conduct Authority, are acting as financial advisers to Inchcape and no one else in connection with the proposed transaction and will not be responsible to anyone other than Inchcape for providing the protections afforded to clients of Greenhill & Co. International LLP and HSBC Bank plc nor for providing advice in relation to the proposed transaction or any other matters referred to herein.

About Inchcape

Inchcape is a leading global premium automotive group, operating in 29 markets with a portfolio of the world’s leading car brands in the fast-growing luxury and premium segments. Inchcape has diversified multi-channel revenue streams including sale of new and used vehicles, parts, service, finance and insurance. The Company has been listed on the London Stock Exchange since 1958, is headquartered in London and employs around 16,000 people.

About Indumotora

Indumotora is a company dedicated to representing and distributing passenger and commercial vehicles, as well as machinery and components, with one of the longest track records of any automotive business operating in Chile. Immediately prior to this transaction, Indumotora represented 22 brands across Chile, Argentina, Bolivia, Colombia and Peru from 249 points of sales, service and parts throughout the region. Following the transaction, Indumotora will continue to represent KIA for passenger vehicles and Hyundai for commercial vehicles.

About the acquired business from Indumotora

The acquired business from Indumotora consists of the representation and distribution operations of Indumotora in Peru, Colombia and Argentina, and selected brands in Chile. In light vehicles, it includes Subaru (in all four countries), DFSK (in Chile, Peru and Colombia) and Suzuki (in Argentina). In commercial vehicles it includes Hino (in Chile and Colombia), as well as Mack and other machinery & components brands in Colombia. Around 1,400 employees will join Inchcape.


Reference to Inchcape plc includes all its worldwide subsidiaries

Forecast adjusted EBITDA and EBIT of £27m and £25m respectively for the 12 months to 31 December 2016 are stated on an unaudited basis that is best representative of the ongoing performance of the acquired assets under Inchcape ownership

As at 30 November 2016, the businesses acquired by Inchcape had estimated gross assets amounting to £217m

Certain information included herein, such as financial estimates, projections and forecasts, contains forward-looking statements which involve risk and uncertainty, such as business, economic and regulatory changes, which could cause actual results to differ materially from such estimates, projections and forecasts. No representation or warranty is given as to the achievement or reasonableness of any forward-looking statements discussed in this document. This document is delivered as at the date specified.