Eagers Automotive Limited has announced to the Australian Stock Exchange (ASX) this morning that it has executed a binding agreement for the sale of its Daimler truck dealership business to US truck dealer operation, Velocity Vehicle Group(VVG).
The sale is reported to be worth $AUD108 million and will deliver an estimated net gain before tax of between $AUD32million and $36 million, subject to external audit and adjustments on completion and continues the ongoing simplification of Eagers Automotive business
Velocity is a privately owned operator of truck dealerships based across the United States and is believed to be the biggest Daimler truck dealer in the USA.
Eagers Automotive have also agreed commercial terms for the sale of its Milperra property in Sydney’s west, the location of its Stillwell Trucks operation, to VVG as part of the transaction.
VVG has a network of dealerships across 36 locations throughout the South West region of the USA, operating and is one of the key global partners with Daimler Truck and Bus.
Daimler Trucks Australia was unavailable for comment when news of the deal was announced to the ASX this morning due to securities and investment rules but a spokesperson said that the company is considering the news, however it released a statement later in the day. (See seperate story on Truck and Bus News)
The Eagers Automotive Daimler truck business currently employs about 650 people across metropolitan and regional centres in Australia, including Brisbane, Newcastle, Sydney, Melbourne, Adelaide and Perth.
Eagers Automotive will continue to own and operate its other existing Webster Truck and Isuzu Truck businesses, which are currently part of the automotive retail division. Following completion of the transaction, its Hino and Iveco operations will also be incorporated into the automotive retail division, removing the requirement for a standalone National Trucks division.
“The divestment of our Daimler truck operations represents another key step in the ongoing simplification of our automotive retail business. VVG will be a great home for the Daimler truck business and offers an exciting future,” said Eagers CEO and managing director Martin Ward.
The transaction is subject to conditions precedent including approval by the Foreign Investment Review Board (FIRB), consents of landlords and counterparties to material contracts, and satisfactory environmental condition reports and all things being equal the transaction completion is anticipated in the first quarter of 2021.