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Highlights:
- MotorCycle Holdings has announced today that it would acquire 100% shares of Mojo Motorcycles and Mojo Electric Vehicles.
- The company will acquire Mojo Group for a cash consideration of up to AU$60 million on a cash free, and debt free basis.
- The acquisition is expected to get completed within 31 October 2022.
Shares of Australian motorcycle dealership operator MotorCycle Holdings Limited (ASX:MTO) started today’s trading session 14.814% stronger at AU$2.480 per share at 10:21 AM AEST today, backed by the acquisition news of Mojo Motorcycles Pty Ltd and Mojo Electric Vehicles Pty Ltd.
MotorCycle announced that it would acquire 100% of the shares in Mojo Motorcycles and Mojo Electric Vehicles. Mojo Group is a leading distributor and importer of motorcycles, scooters, ATVs, electric motorcycles, and genuine spare parts and accessories in Australia and New Zealand. The group has a strong network of 150 holders at present.
Details of MotorCycle’s acquisition of Mojo:
According to MotorCycle’s recent update, the company will acquire Mojo Group from companies owned by Michael Poynton and Joshua Carter for consideration of up to AU$60 million on a cash-free, and debt-free basis, which includes:
The company will be funding the cash component of the acquisition by increasing its debt facility.
The consideration of the Mojo acquisition represents earnings multiple of 4.1 times of Mojo Group’s FY22 net profit before tax and on a proforma FY22 consolidated basis. Furthermore, the transaction is expected to be 18% earnings per share accretive before synergies, integration costs and PPA-related amortisation.
The principals of Mojo Group, Michael Poynton and Joshua Carter, will now take up the responsibilities of senior executives with MotorCycle. Along with that, Michael Poynton will also join the board of MotorCycle.
However, the completion of the acquisition of Mojo depends on some conditions, such as securing approval for the issue of the consideration shares at the Annual General Meeting and receiving the significant contract and third-party consent.
As per the update, the acquisition is expected to get completed by 31 October 2022.
David Ahmet, Managing Director and founder, MotorCycle, said:
