Asbury Automotive Group is acquiring Dallas-based Park Place Dealerships in a $1 billion all-cash transaction expected to close in the first quarter 2020, the company announced today.
The newly inked deal adds 17 new vehicle franchises to Asbury’s operations, bringing its total to 124 franchises spread across 88 dealerships. The majority of the Park Place Dealerships are located in the Dallas market and include new-vehicle franchises from Mercedes-Benz, Lexus, Jaguar, Land Rover, Porsche, Volvo, Bently, Rolls Royce, McLaren, Maserati, Karma, and Sprinter.
In addition, Asbury intends on opening a Jaguar/Land Rover franchise dealership in Austin, Texas, “late” in the first quarter of 2020, the company noted.
“This acquisition will transform our total portfolio to 50% luxury stores and add approximately $2 billion in expected annualized revenues,” said Asbury’s President and Chief Executive David Hult. The transaction will also increase Asbury’s geographic mix to 36% of revenue derived from the Texas market.
The new-vehicle retailer is betting the luxury segment is “more resilient” during a downturn, the company noted. “[Luxury segements] tend to have higher and more stable margins, fewer dealers nationwide, and a higher portion of gross profit from parts and service.”
The breakdown of the purchase price includes $785 million of goodwill — the cost to purchase the business minus the fair market value of the tangible assets — $215 million for real estate and leasehold improvements, and $30 million for parts and fixed assets.
For more content like this, join us at the upcoming Auto Finance Accelerate event, March 9-11 at the Omni San Diego. Combining three crucial topics in auto lending and leasing, Auto Finance Accelerate dives into the strategies and knowledge needed to enhance your company’s auto finance sales, marketing, and innovation. Register before Friday, January 31st to save with early registration rates. Visit www.AutoFinanceAccelerate.com to learn more.