Cambria buys Summit retail group

Cambria Automobiles Ltd is to acquire loss-making Summit Motors
Investment (UK) Ltd, from its owner, Sumitomo Corporation of
Japan.

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Cambria, which was formed in 2006 by private equity group,
Promethean Investment Funds LP has embarked on an acquisition spree
to move it into the top 20 dealerships in the UK by size.
Promethean announced January 9 that it has invested a further £8m
to help Cambria fund its purchase of Summit.

The total funding required for the transaction (including the
purchase of inventory) by Cambria is estimated at £20m. The balance
of the consideration is expected to be financed by Cambria out of
bank borrowings, Promethean said.

The final sum which Cambria will pay for Summit will be based on
the value of the assets transferred on completion of the deal. This
is subject to finalisation of Summit’s accounts. Summit’s book
value as at December 31, 2006 stood at £3.7m.

Restructuring planned to turn Summit around

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Summit reported a net loss of £3.3m in 2006 on a turnover of
£203m and is expected to extend losses to between £2m and £3m in
2007, Cambria’s, chief executive officer Mark Lavery told Motor
Finance.

A rationalisation of Summit’s operations will be necessary to
turnaround the business.

“We’re reviewing the whole business through the course of
January and February. There will be a rationalisation programme
that does not include shutting any of the businesses because they
are all in good locations, good sites, good brands and good
representation but there are areas of the business that will need
to be rationalised,” Lavery said, adding that he expected to lay
off some of Summit’s 653-strong staff.

The Summit buy will expand Cambria’s current dealership network
of four outlets by 15 outlets located in the south-west of England
and raise Cambria’s standing to among the top 30 dealerships by
size in the UK.

Cambria, which has acquired dealerships franchises for Jaguar
and Ford will also expand its portfolio to include Aston Martin and
Volvo with Summit. At the same time, Summit’s Jaguar and Ford
franchises held through the Dove, Dees, Grange and Invicta Motors
dealerships will offer economies of scale.