Motorcycle Holdings Buys Its Rivals Out of Administration on the Cheap

Fund managers say the highly accretive Peter Stevens and Harley-Heaven deal leaves the stock cheap even after a strong 2025

17 Apr 2026 · 4 min read

A distressed asset purchase transformed Motorcycle Holdings almost overnight in mid-2025, as the company bought its two largest rivals out of administration for a fraction of their revenue and lifted its national market share above 20 per cent.

A rare chance to buy the competition cheaply

Cadence Capital's July 2025 update detailed the deal: Motorcycle Holdings acquired Peter Stevens and Harley-Heaven, both in administration, for between $7 million and $9 million, giving it a presence in Perth and Adelaide to complement its existing east coast and New Zealand operations. Spheria Asset Management put the scale of the shift in context, noting the acquisition lifted MTO's national motorcycle market share from 16 per cent to 20 per cent, with the acquired dealerships alone having generated $144 million in sales and $4.5 million in profit before tax, for a total consideration Spheria called highly accretive even before assuming any synergies.

This significantly expands MTO's market presence and increases its market share from 16% to 20% of the national motorcycle market for a total consideration of only $7m to $9m plus vehicle inventory acquired from bailment financiers. Despite the share price performance, the business trades on 8x FY26 EV/EBIT.

— Spheria Asset Management, Monthly Report, July 2025

Organic growth adds to the acquisition story

Spheria's September 2025 update showed the underlying business performing strongly even before the acquisition benefits flowed through: full-year revenue growth of almost 12 per cent, new and used vehicle unit growth of 7.9 per cent and 4.4 per cent respectively, and organic market share rising from 15.5 per cent in FY24 to 16.6 per cent in FY25, with earnings up 28 per cent year on year on lower interest costs and improved inventory management. Prime Value Asset Management's July 2025 review flagged the acquisitions as likely double-digit EPS accretive excluding synergies, with further upside possible from cost synergies and continued industry rationalisation.

A cheap valuation persists through a volatile share price

Spheria's December 2025 update reported organic market share had climbed further to 17.8 per cent, taking total share including acquisitions to 22 per cent, even as shares fell 16 per cent that month on no specific news, a pullback Spheria saw as some reprieve from a 63 per cent gain over the 2025 calendar year rather than any deterioration in the business, still trading on an undemanding 8 times FY26 EV/EBIT. Prime Value Asset Management's February 2026 update pointed to a similarly compelling valuation on a forward basis, trading at around 6 times FY27 earnings with an after-tax earnings yield of 17 per cent and a fully franked 8 per cent dividend.

MTO is Australia's importer of the fast-growing CF Moto brand, is vertically integrated providing multiple avenues to grow and recently acquired its largest competitor with multiple synergy and market consolidation benefits. As an importer, it's a beneficiary of a stronger Australian dollar and motorcycles offer a fuel efficient alternative to cars when fuel prices are high.

— Prime Value Asset Management, Monthly Report, February 2026

A small cap sell-off creates a further buying opportunity

Forager Funds' April 2026 update described using a broader small-cap sell-off to add to its position, citing MTO's 20 per cent market share following its largest competitor acquisition a year earlier and its low earnings multiple, even amid concerns about Australian consumer spending, as reasons the stock remained attractive despite the broader market's reaction.