Management of Motorcycle Holdings estimates 18% accretion on FY22 pro forma earnings following the -$60m purchase of Mojo Group, a leading motorcycle, ATV and genuine spare parts importer and distributor.

Morgans feels the acquisition is a shrewd move to diversify the business, while adding potential new growth avenues via the ATV and agriculture market, as well as electric vehicles.

As half of the purchase price is via scrip, Mojo principals will hold 16% of Motorcycle Holdings post-acquisition, plus representation on the board.

The Add rating is unchanged, while the target rises to $3.42 from $3.12.

Sector: Retailing.

Target price is $3.42.Current Price is $2.44. Difference: $0.98 - (brackets indicate current price is over target). If MTO meets the Morgans target it will return approximately 29% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2022 Acquisdata Pty Ltd., source FN Arena