ECD Auto Design to Acquire Brand New Muscle Car Assets

Rhea-AI Summary

ECD Auto Design (ECDA) acquires assets from Brand New Muscle Car, entering the classic American muscle car market. The deal involves a $1.5 million restricted stock issuance. ECD aims to expand its offerings to include classic Ford Mustangs and other American muscle cars, tapping into a $15 billion market. The acquisition aligns with ECD's strategy to cater to the high-end, bespoke car segment and target ultra-high net worth individuals.

Insights

Automotive Industry Analyst

The acquisition by ECD Auto Design of assets from Brand New Muscle Car represents a strategic expansion for ECD into the classic American muscle car market. This move leverages ECD's established expertise in luxury car restoration and positions the company to capture a share of the significant $15 billion market for high-end and collectible cars. The ability to add a production line to their existing manufacturing facility in Orlando, Florida, indicates that ECD is prepared for an increase in production capacity, which could lead to enhanced revenue streams.

However, the integration of Brand New Muscle Car's operations and the adaptation of ECD's design process to American muscle cars will require careful management. The success of this acquisition will largely depend on ECD's ability to maintain the quality and bespoke nature of the products, which are critical factors in the luxury collectible car market. The issuance of restricted stock valued at $1.5 million suggests a conservative approach to financing the acquisition, potentially minimizing immediate cash outflows and dilution of existing shareholders' equity.

Market Research Analyst

Entering the classic American muscle car segment allows ECD to diversify its product offerings and tap into a different customer base, potentially increasing its market share. The move signals ECD's commitment to growth and innovation within the niche market of high-end restorations. By acquiring a company that specializes in building classic cars from scratch, ECD is positioning itself as a one-stop-shop for luxury car enthusiasts, which could enhance brand loyalty and customer retention.

It is important to monitor consumer trends, as the demand for bespoke, one-of-a-kind vehicles is closely tied to the economic status of the ultra-high net worth population. Fluctuations in this demographic's spending power could significantly impact ECD's business. Additionally, ECD's strategy to offer bespoke classic Ford Mustangs could differentiate the company in a competitive market, provided that the uniqueness and quality of the restorations remain uncompromised.

Financial Analyst

The transaction's structure, involving restricted stock, suggests a potentially accretive deal for ECD, assuming the acquired assets generate sufficient returns. The $1.5 million valuation given to the restricted stock at the time of issuance will be an important figure to track against the future earnings contributions from the new product lines. Investors should consider the short-term costs associated with the acquisition, such as integration expenses, against the potential long-term benefits of expanded market reach and product diversification.

It's important for investors to evaluate the execution risks, including the scalability of ECD's bespoke design process and the company's ability to maintain high standards of craftsmanship. The move could also signal confidence in the growth prospects of the luxury car restoration market, particularly within the segment of classic American muscle cars. Investors should keep an eye on the company's quarterly financials following the acquisition to assess the impact on margins and earnings per share.

KISSIMMEE, Fla., April 4, 2024 /PRNewswire/ -- ECD Auto Design (Nasdaq:ECDA) ("ECD" or the "Company"), the world's largest Land Rover and Jaguar restoration company known for its custom luxury builds, including bespoke Defenders, Range Rovers and Jaguar E-Types announced today that it has signed an agreement to acquire certain assets from Brand New Muscle Car, a premier builder of classic American muscle cars for restricted stock of ECD to be valued at $1.5 million on the date of issuance.

Brand New Muscle Car, founded in 2005 and headquartered in Broken Arrow, OK, is the original, from scratch restorer of classic American muscle cars designed with new parts just as the customer wants it.

Scott Wallace, CEO of ECD Auto Design said, "We are excited to announce our first acquisition as a publicly traded company. This acquisition provides our company, founded by a group of British friends, an entry point to design and sell bespoke classic Ford Mustangs, among several other classic American muscle cars in a US manufacturing plant with US employees. Our 100,000 square foot Orlando, Florida manufacturing facility has the ability to add a production line to our existing manufacturing footprint. By acquiring Brand New Muscle Car, we will have the opportunity to design and build one-of-one classic Mustangs through our unique and industry-leading client design process, which are some of the most sought after restomod opportunities in the United States.

"Our vision at ECD is to tap into the greater than $15 billion market ecosystem for high end and collectible cars. Today, we are a leading retrofitter of classic British luxury cars, but we aspire to build and sell additional makes and models that are also in high demand. There is a growing appetite among the ultra-high net worth population who desire one-of-a-kind products and experiences and ECD has expanded that capability into the classic American car market."

About ECD Auto Design

ECD, a public company trading under ECDA on the Nasdaq, is a creator of restored luxury vehicles that combines classic English beauty with modern performance. Currently, ECD restores Land Rovers Defenders, Land Rover Series IIA, the Range Rover Classic and the Jaguar E-Type. Each vehicle produced by ECD is fully bespoke, a one-off that is designed by the client through an immersive luxury design experience and hand-built from the ground up in 2,200 hours by master-certified Automotive Service Excellence ("ASE") craftsmen. The company was founded in 2013 by three British "gear heads' whose passion for classic vehicles is the driving force behind exceptionally high standards for quality, custom luxury vehicles. ECD's global headquarters, known as the "Rover Dome," is a 100,000-square-foot facility located in Kissimmee, Florida that is home to 90 talented craftsmen and technicians, who hold a combined 61 ASE and five master level certifications. ECD has an affiliated logistics center in the U.K. where its seven employees work to source and transport 25-year-old work vehicles back to the U.S. for restoration. For more information, visit www.ecdautodesign.com.

Investor Contact:
Brian M. Prenoveau, CFA
MZ Group – MZ North America
ECDA@mzgroup.us
+561 489 5315

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SOURCE ECD Automotive Design

FAQ

What is the ticker symbol for ECD Auto Design?

The ticker symbol for ECD Auto Design is ECDA.

What assets did ECD Auto Design acquire?

ECD Auto Design acquired certain assets from Brand New Muscle Car, a premier builder of classic American muscle cars.

What is the value of the restricted stock issuance in the acquisition?

The restricted stock of ECD to be issued in the acquisition is valued at $1.5 million.

What market is ECD Auto Design aiming to tap into with this acquisition?

ECD Auto Design is aiming to tap into the greater than $15 billion market ecosystem for high-end and collectible cars.

What is ECD Auto Design's vision for the future?

ECD Auto Design aims to expand its offerings to include additional makes and models that are in high demand, catering to the ultra-high net worth population.