For the many Victorians looking to enjoy the post-pandemic world in comfort, there is a good chance they will be doing so via a Peter Warren Automotive (ASX: PWR) car dealership with the dealer significantly increasing its Victorian footprint with the $104m acquisition of Penfold Motor Group and its 10 sites.

With the acquisition, Peter Warren instantly increases its Victorian presence where they will seek to replicate the successful dealership models they have established in other States where they have ‘auto-malls’. Within these close-by locations, prospective car buyers will be able to browse Audi, Mazda, Volkswagen, Hyundai and Suzuki vehicles in quick succession, aligning with Peter Warren’s existing portfolio.

“This is an important step in delivering on our growth strategy and expands our footprint across the Eastern Seaboard, giving us immediate scale in the Victorian market,” said Peter Warren CEO, Mark Weaver.

“Bringing Penfold Motor Group into the Group also provides an enviable platform for further growth in Victoria, as we roll out our proven auto-mall concept that has been very successful in Sydney and Queensland for generations.

“The Penfold Motor Group is a very well-regarded business with a rich history of operating in the region, and the acquisition will be accretive for our shareholders. We are delighted to welcome the management team into our Group and expand our operating footprint in the region over time.”

Established in 1964, Penfold Motor Group has grown to be one of the most recognised dealership brands in Melbourne to now employ more than 330 staff across its 10 locations.

In FY21, Penfold generated $354m revenue, however, this was largely impacted by the pandemic that resulted in showroom closures. It is estimated that this cost Penfold around $60m in sales while the wider trend of travel restrictions in Victoria also limited the amount of residents looking to purchase new cars.

While working-from-home trends are tipped to remain in place, Victorians have used the savings in travel expenses to accrue substantial savings over the past two years which could soon be applied to discretionary travel spending such as new cars, as Melbourne re-opens its borders.

Total consideration for the 10 leasehold operations is $104 million which comprises $88m in cash and $16m in PWR shares and an Issue Price of $3.02 each. The cash component will be covered by a new $96m finance facility which has been secured against Peter Warren’s owned property in Warwick Farm, NSW.

Without accounting for supply chain or operating synergies, Peter Warren expects the acquisition will deliver more than 10% EPS growth on a pro forma FY22 basis.

Included in the 10 leasehold operations are Audi operations in Burwood, Doncaster and Waverley, Mazda operations in Burwood and Frankston, Volkswagen and Hyundai dealerships at Doncaster, Suzuki operations in Burwood and service centres in Hawthorn and Malvern.

The acquisition will increase Peter Warren’s current footprint to a combined 82 dealerships, across New South Wales, Queensland, and Victoria and cement Peter Warren’s position as a leading Australian automotive dealer group.

In 2020, Victoria accounted for 25% of all new care sales in Australia.