Largest auto retail acquisition since 2021
includes 29 franchises, six collision centers, 20 dealerships in
Virginia, Maryland and Delaware and one of the U.S.’ highest volume
Toyota dealerships
Asbury Automotive Group, Inc. (NYSE: ABG), one of the U.S.’
largest automotive retail and service companies, has completed the
acquisition of Jim Koons Automotive Companies, the ninth largest
privately-owned dealership group in the U.S. The sale includes 20
dealerships, 29 franchises, six collision centers and one of the
highest volume Toyota dealerships in the US.
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“With the completion of this milestone transaction, Asbury is
proud to add one of the best run dealership groups in the industry
and extend our footprint into the thriving Washington-Baltimore
market, an economically robust and fast growing region of our
country,” said David Hult, Asbury's President and Chief Executive
Officer. “Jim Koons’ passion for the car business, as well as his
enthusiastic leadership of his group, is evident at every level of
the Koons organization. Not only are Koons’ twenty dealerships
consistent leaders in sales volume and customer satisfaction, they
are also renowned for their positive employee and workplace
culture, essential values we share at Asbury. We welcome Koons
employees to the Asbury family, and are grateful for their hard
work and talent, and for the Asbury team, in the successful
completion of this historic transaction.”
The acquisition will add approximately $3 billion in expected
annualized revenues. Asbury anticipates the Koons’ dealership
profitability to be generally in line with the profitability of
Asbury’s dealerships. The purchase price of approximately $1.2
billion includes $740 million of goodwill, $420 million of real
estate and leasehold improvements as well as vehicle inventory (net
of floorplan), parts inventory and fixed assets of the dealerships.
The acquisition was funded with borrowings under Asbury’s existing
credit facility and cash on hand.
Founded in 1973, Jim Koons Automotive Companies was one of only
13 private groups with over $3 billion in revenue in 2022. The
group, comprised of top volume franchises including Toyota, Lexus,
Mercedes-Benz, Ford, Kia, Hyundai, Volvo, Stellantis and General
Motors, is the dominant retailer in the thriving
Washington-Baltimore market, the 4th largest combined statistical
area in the U.S. by population per 2020 census data. Koons’ revenue
per dealership ranked 10th overall in 2022 according to Automotive
News, and 5th in the U.S. for groups with greater than $2 billion
in revenue.
“We are so pleased to see the successful transition of our
company to Asbury, knowing that being part of this sterling
organization will provide tremendous career opportunities for our
employees and a continuation of exceptional service to our
customers and community. Koons’ rich 50 year history could not have
been achieved without the contributions and support of our stellar
employees,” said Jim Koons, Chairman of Jim Koons Automotive
Companies. “Our transaction with Asbury was a large and complex
one, and the excellent and dedicated teamwork demonstrated by both
companies is a clear indicator of its future success. I would also
like to extend a special thank you to the team at Kerrigan
Advisors. Their transaction experience and expert knowledge of the
buy/sell market was invaluable to me and my team. Kerrigan
identified the ideal buyer for our group in Asbury and shepherded
our organization through this historic sale from start to
finish.”
Among its many accolades, Koons is the only dealership group in
the region to be recognized multiple times by the Washington Post
and Washington Business Journal as a top place to work. Recently,
Koons paid $7 million in tenure bonuses to employees who had served
the organization for greater than 10 years. With exceptional
employee relations, Koons dealerships are well-regarded by
automakers, consistently earning high customer satisfaction scores,
as well as many OEM awards, including Toyota President’s Cabinets
Award, Elite of Lexus, Ford’s President’s Award, Toyota’s Board of
Governors, Ford’s Triple Crown Award, and Mercedes’ Best of the
Best.
“Jim Koons has put his heart and soul into the car business for
most of his life. His passion and commitment to excellence is
evident in the incredible organization he built in the Jim Koons
Automotive Companies. It was a real honor to represent him and his
organization in this once-in-a-lifetime transaction,” said Erin
Kerrigan, Founder and Managing Director of Kerrigan Advisors.
“Congratulations to Jim Koons, his management team, and Asbury on a
very successful transaction.”
Stephen Dietrich and Brooke Sizer of Holland & Knight served
as legal counsel and Baker Tilly served as the transaction
accounting firm to Koons. Jones Day and Hill Ward Henderson served
as legal counsel and FORVIS served as the transaction advisory firm
to Asbury.
About Asbury Automotive Group, Inc.
Asbury Automotive Group, Inc. (NYSE: ABG), a Fortune 500 company
headquartered in Duluth, GA, is one of the largest automotive
retailers in the U.S. In late 2020, Asbury embarked on a five-year
plan to increase revenue and profitability strategically through
organic and acquisitive growth as well as their innovative
Clicklane digital vehicle purchasing platform, with its
guest-centric approach as Asbury’s constant North Star. Asbury
currently operates 158 new vehicle dealerships, consisting of 210
franchises, representing 31 domestic and foreign brands of
vehicles. Asbury also operates Total Care Auto, Powered by Landcar,
a leading provider of service contracts and other vehicle
protection products, and 37 collision repair centers. Asbury offers
an extensive range of automotive products and services, including
new and used vehicles; parts and service, which includes vehicle
repair and maintenance services, replacement parts and collision
repair services; and finance and insurance products, including
arranging vehicle financing through third parties and aftermarket
products, such as extended service contracts, guaranteed asset
protection debt cancellation, and prepaid maintenance. Asbury ranks
18th in the 2023 Forbes list of America’s Best Mid-Sized Companies.
Asbury is recognized as one of America’s Greatest Workplaces 2023
by Newsweek as well as one of the Best Companies to Work For in the
Retailers industry by U.S. News & World Report.
For additional information, visit www.asburyauto.com.
About Jim Koons Automotive Group
Founded in 1973, Koons is one of the U.S.’ largest private auto
dealership groups and the #1 automotive retailer in the
Washington-Baltimore region for over 25 years. In 2022, the group
retailed more than 61,000 units (26,000 new and 35,000 used) and
had over $3 billion in revenue. Koons employs more than 2,500
people in 20 locations throughout the Washington D.C., Baltimore,
and Philadelphia region. Koons is the only automotive dealer to be
named a Washington Business Journal's "Best Place to Work" 11 times
and a Washington Post’s "Top Workplace" three times.
About Kerrigan Advisors
Kerrigan Advisors is the premier sell-side advisor and thought
partner to auto dealers nationwide, having represented some of auto
retail’s largest transactions and advised on the sale of more of
the largest dealership groups in the US than any other buy/sell
firm in the industry. Led by a team of veteran industry experts
with backgrounds in investment banking, private equity, accounting,
finance and real estate, the firm develops a customized approach
for each client to achieve their personal and financial goals. In
addition to sell-side advisory work, Kerrigan Advisors also
consults with dealers on growth planning, strategic initiatives,
transactional and real estate due diligence and market
valuations.
Forward-Looking
Statements
To the extent that statements in this press release are not
recitations of historical fact, such statements constitute
"forward-looking statements" as such term is defined in the Private
Securities Litigation Reform Act of 1995. The forward-looking
statements in this press release may include statements relating to
goals, plans, expectations, projections regarding the expected
benefits of the proposed transaction, managements plans,
projections and objectives for the proposed transaction, future
operations, scale and performance, integration plans and expected
synergies therefrom, and our financial position, results of
operations, market position, capital allocation strategy,
initiatives, business strategy and expectations of our
management.
The following are some but not all of the factors that could
cause actual results or events to differ materially from those
anticipated, including:; the risk that Asbury will not be able
renegotiate certain near-term leases prior to their expiration or
otherwise relocate those dealerships to new locations satisfactory
to the manufacturers; failure to realize the benefits expected from
the proposed acquisition; failure to promptly and effectively
integrate the acquisition; our ability to execute our business
strategy; any ongoing impact from the COVID-19 pandemic on supply
chain disruptions impacting our industry and business, market
factors, Asbury's relationships with, and the financial and
operational stability of, vehicle manufacturers and other
suppliers, acts of God, acts of war or other incidents and the
shortage of semiconductor chips and other components, which may
adversely impact supply from vehicle manufacturers and/or present
retail sales challenges; risks associated with Asbury's
indebtedness and our ability to comply with applicable covenants in
our various financing agreements, or to obtain waivers of these
covenants as necessary; risks related to competition in the
automotive retail and service industries, general economic
conditions both nationally and locally, governmental regulations,
legislation, including changes in automotive state franchise laws,
adverse results in litigation and other proceedings, and Asbury's
ability to execute its strategic and operational strategies and
initiatives, including its five-year strategic plan, Asbury's
ability to leverage gains from its dealership portfolio, Asbury's
ability to capitalize on opportunities to repurchase its debt and
equity securities or purchase properties that it currently leases,
and Asbury's ability to stay within its targeted range for capital
expenditures. These risks, uncertainties and other factors are
disclosed in Asbury's Annual Report on Form 10-K, subsequent
quarterly reports on Form 10-Q and other periodic and current
reports filed with the Securities and Exchange Commission from time
to time.
These forward-looking statements and such risks, uncertainties
and other factors speak only as of the date of this press release.
We expressly disclaim any obligation or undertaking to disseminate
any updates or revisions to any forward-looking statement contained
herein, whether as a result of new information, future events or
otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20231211020081/en/
Asbury Media Contact: Joe Sorice
(jsorice@asburyauto.com), Manager, Investor Relations,
770-418-8211
Kerrigan Advisors Media Contact: Melanie Webber
(melanie@mwebbcom.com), mWEBB Communications, 949-307-1723
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