Saturday, January 25

Asbury Automotive Group masses up on luxurious dealerships in $1 billion deal


The deal, described by one buy-sell knowledgeable as “big,” is predicted to shut by the tip of March, pending approval by producers and regulators. Asbury will purchase three Mercedes-Benz dealerships (one together with a Sprinter franchise), two Jaguar-Land Rover and two Lexus shops, one Porsche and one Volvo retailer in addition to Park Place Premier Assortment, which sells Bentley, Rolls-Royce, McLaren, Maserati and Karma.

Ken Schnitzer began Park Place in 1987 with one Mercedes-Benz retailer.

Schnitzer, chairman of Park Place, stated the choice to promote most of his portfolio wasn’t simple.

“I’m extraordinarily happy with what we now have achieved and the tradition we now have constructed,” Schnitzer, 66, stated in an announcement. “I’ll maintain my hand within the automotive business by retaining two dealerships and a physique store in Grapevine.”

Brodie Cobb, CEO of Presidio Group in San Francisco, an funding banking adviser representing Park Place, stated the dealerships have been marketed on the market this fall. Discussions with Asbury have been critical for about three months, he stated.

“There have been a number of different potential patrons, all of whom have been certified to each buy it and combine it and function it,” Cobb stated. He couldn’t establish different suitors due to nondisclosure agreements.

Cobb stated Schnitzer and his brother, Doug Schnitzer, CEO of actual property holding firm Senterra, are enterprise companions in auto retail and different endeavors. Cobb stated the 2 thought it was the fitting time to promote many of the dealerships.

Ken Schnitzer related with Asbury administration by discussions that coated the tradition at Asbury at the moment and into the longer term, Cobb stated. Hult informed analysts he expects to be taught from Park Place and that greatest practices might be deployed throughout the Asbury platform.

“It appeared like an excellent match for the place Park Place has been and is at the moment,” Cobb informed Automotive Information. “They usually seem to be wonderful stewards of the Park Place model, its shops, its workers and, finally, its clients.”

The deal is without doubt one of the largest buy-sell dealership transactions of the previous decade, in line with experiences and buy-sell specialists. It’s smaller than Berkshire Hathaway’s 2015 mega acquisition of 81 shops from Van Tuyl Group however bigger than different offers, comparable to Lithia Motors Inc.’s 2014 buy of 27 DCH Auto Group dealerships.

Asbury has been rising its retailer portfolio. Already this 12 months, Asbury purchased the four-store Invoice Estes Automotive, a Toyota retailer and collision heart, all within the Indianapolis market, and entered Colorado with its first Subaru retailer, in Thornton. The six shops and collision store, slated so as to add $425 million in annualized income, price the corporate $210 million, in line with a regulatory submitting. Asbury additionally bought one dealership and a collision heart within the Houston market this 12 months for $39.1 million.

Hult informed analysts final week that Asbury could search for extra shops for the Denver market however largely could be centered on paying down debt over the subsequent two years.

Asbury stated the Park Place buy consists of $785 million of goodwill, about $215 million in actual property and leasehold enhancements and about $30 million in elements and different mounted belongings. The corporate stated it might pay for the acquisition by current credit score, operational money movement and dedicated financing.

Asbury, of Duluth, Ga., ranks No. 7 on Automotive Information‘ listing of the highest 150 dealership teams based mostly within the U.S., retailing 105,275 new automobiles in 2018.

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