Halfords to acquire Axle Holdings in £64m deal

Halfords have announced a £64m capital raise to fund the acquisition of Axle Group Holdings for £62m and is subject to adjustment for normalised working capital.

Axle is a well-established business in the tyre and automotive servicing, maintenance and repair sector. The motivation behind the acquisition is cost saving efficiencies, which are expected to total £18m by year 5.

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Halfords have been enjoying strong growth in their automotive services and the acquisition will highlight where Halfords see future growth.

“The purchase of Axle Group Holdings (National), for £63.4m, continues the groups trend of acquisitions in recent years. Halfords’ more recent acquisitions have been successful, so the market’s optimism will have something to do with expectations of a repeat performance. While the efficiencies should add to group profit pretty quickly, the bigger story is that the move helps accelerate Halfords’ plan to weight operations toward motoring services,” said Matt Britzman, Equity Analyst at Hargreaves Lansdown.

“Given the majority was issued via a placing, it’s not only a large deal, but also dilutive for most retail investors. That said, the group performed very well during the pandemic and using that momentum to push toward their long term goals is a positive step.”

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