The Board of Directors of AutoWallis Plc. has decided to acquire Wallis Kerepesi Kft., the operator of the largest Opel and third-largest Kia dealership, as well as of K85 Kft., the owner of the site of its operation, the company tells the Budapest Business Journal.
The acquisition of Wallis Kerepesi, which realized a turnover of HUF 8.7 billion in 2019, may increase the revenue of the stock exchange automotive company by more than 10% this year.
The decision follows several months of planning. According to a letter of intent signed by the owners, AutoWallis will pay a purchase price of HUF 1.02 bln, determined via an independent appraisal report, exclusively by its own shares.
Based on the earlier authorization of the corporation’s shareholders, the rate per share of the 13,511,723 shares to be newly issued is the average stock exchange rate of the previous 30 days: HUF 75.49. For the conclusion of the transaction, several additional steps will be required, including the preparation of the prospectus for the issuance of new shares.
The companies to be contributed are presently owned by Wallis Asset Management Zrt. in 60%, and by TT Automobil Kft. – which is owned by the members of the Wallis Kerepesi management – in 40%.
Following the transaction, the members of management of Wallis Kerepesi will become AutoWallis shareholders (1.9%). The main owner of AutoWallis, Wallis Asset Management, will have its share changed from 72.47% to 71.78%.
Regarding the acquisition, Gábor Ormosy, the CEO of AutoWallis pointed out that it fits neatly in the corporation’s five-year strategy announced last year, in which they had calculated with a doubling of the HUF 65.5 bln revenue of 2018 by 2024.
Wallis Kerepesi has been a distributor and service provider of Opel vehicles since 1990 and the Kia brand since 2015. Based on the data of the past five-10 years, it is one of the most successful dealerships in the Hungarian market. For Opel vehicles, in 2019 it was the largest actor in the Hungarian market with 903 new cars sold and a 6-7% market share, while it was the third most significant actor for Kia vehicles, with 762 new cars sold and a market share of 10-12%.
Wallis Kerepesi, with its average 65 employees, sold 541 used cars in 2019, while also providing authorized repair service for the Opel, KIA, and Isuzu brands, as an independent workshop.
Between 2016 and 2018, Wallis Kerepesi achieved a revenue of HUF 6-8 bln, while in 2019, based on preliminary data, its revenue was HUF 8.7 billion. The increasing turnover was accompanied by a growing profit: by 2019, the corporation’s earnings before taxes increased by 162% to HUF 156.4 million, its EBITDA by 110% to HUF 184.7 mln, compared to 2018 (preliminary data based on the Hungarian Act on Accounting).
The acquisition includes the nearly 7,000 sqm site of Wallis Kerepesi, as well as the nearly 3,000 sqm real estate located there (K85 Kft.). Besides the salon itself, there is also a 13-stall workshop with a test lane, as well as a body shop with six bodywork and four painting stalls, and a painting cabin.