Inchcape has agreed to acquire Trivett Automotive Group, a luxury vehicle company in Australia.

The international automotive distributor and retailer will take over the company on March 1st for a total estimated cash consideration of £78m.

The deal is expected to strengthen Inchcape's position in the Australian market where the company has been operating since 1992.

Trivett sells 9,000 vehicles per year including premium brands - BMW, Jaguar, Land Rover, Volvo, Honda, Rolls-Royce, Bentley, Aston Martin and McLaren.

Revenue for the 2012 calendar year came to £390m and earnings before interest and tax reached £12m.

Trivett has 10 freehold properties in Sydney with a market value of £31m.

Inchcape said the strong Australian economy has driven growth in the automotive demand, particularly in metropolitan areas and mining territories.

Last year the new vehicle market grew a record 10% year-on-year to 1.1m units.

André Lacroix, Group Chief Executive of Inchcape, said: "This is a significant step in the development of our operations in Australasia, giving us the opportunity to build further scale with premium and luxury brands represented in high quality retail centres in Sydney.

"The transaction is in line with our strategy of expansion in Asia Pacific and Emerging Markets with luxury and premium brand partners. Trivett is a high quality operation and an excellent fit for Inchcape."

Analysts at Investec said Trivett was a good fit and is in line with Inchcape's strategy to expand in Asia Pacific and emerging markets. The broker reiterated its 'buy' rating and increased the target price to 580p.

"The Australian market is experiencing continuing demand premiumisation, making it an ideal market for Inchcape," it said.

"Trivett has an attractive brand portfolio, and operationally we expect Inchcape to drive returns over time through utilisation of customer service and operational best practices."

Inchcape shares rose 0.50% to 507.00p at 08:08 Wednesday.


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