The deal is expected to be earnings accretive within the current financial year.

After establishing a dominant footprint in the Australian market, motorbike dealership network Motorcycle Holdings (ASX:MTO) is building out its regional presence with the announcement of a new acquisition in New Zealand.

MTO advised this morning that it will acquire Forbes and Davies, a leading wholesaler of motorcycle parts and supplies including tyres, helmets and accessories.

Forbes and Davies is the direct equipment supplier for more than 500 motorcycle retailers in the New Zealand market.

It booked annual turnover of $6m in 2021 and employs 15 staff.

Subject to due diligence, MTO expects to close the deal this month, and CEO Dave Ahmet said it offers the ideal opportunity to expand the company’s regional presence.


Investment synergies

Among the commercial benefits that will stem from the deal, Ahmet said MTO will allow Forbes and Davies to expand its existing product range to build market share.

“Adding many products that we already hold distribution rights for in New Zealand gives Forbes and Davies an opportunity to enhance and broaden the range of motorcycle, bicycle and kart products that it offers to the dealer network,” Ahmet said.

In addition, the New Zealand-based company will be able to leverage the strengths of MTO’s balance sheet and financial resources to drive further sales.

Strategically, it marks a successful strike for the MTO management team, which has been seeking acquisition opportunities following a year of strong profits and positive tailwinds from post-COVID trading conditions.

“MotorCycle Holdings is in a strong financial position, and we are actively seeking strategic acquisition opportunities,” Ahmet said.

“Forbes and Davies is a well-established business with a strong reputation in New Zealand and this acquisition provides further geographical diversification for the company.”

This article was developed in collaboration with Motorcycle Holdings, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.