Lookers has announced the acquisition of Benfield Motors for £87.5m. This is an excellent transaction, the largest in the sector for some time, and will be immediately earnings enhancing. We have upgraded our current year EPS forecast by 5.1% (part year benefit) and next year’s EPS forecast by 12.5%. There is a clear route to value creation with the MD of the Motor Division having previously run Benfield, and a high level of confidence in management’s integration plan and future synergies. Using consistent valuation methodology we have upgraded our target price by 10% to 205p and reiterate our BUY stance on the stock.