HOUSTON, Sept. 13, 2021 /PRNewswire/ -- Group 1
Automotive, Inc. (NYSE: GPI), ("Group 1" or the "Company" or
the "Buyer"), an international, Fortune 500 automotive
retailer with 188 dealerships located in the U.S., U.K., and
Brazil, today announced it has
entered into a definitive agreement to purchase substantially all
the assets, including real estate, of Prime Automotive Group (the
"Seller"), headquartered in Westwood,
Massachusetts. In 2020, the corresponding Prime
dealerships generated $1.8 billion in
annual revenues and retailed over 52,000 new and used vehicles.
"Group 1 has successfully operated in the Northeastern U.S. for
many years. We are pleased to have this opportunity to
leverage our existing cost structure and to further diversify our
U.S. footprint," said Earl J.
Hesterberg, Group 1's President and Chief Executive
Officer.
With 30 dealership locations and three collision centers in the
Mid-Atlantic and New England markets, Prime's brand portfolio
includes Acura, Airstream, Audi, BMW, Buick, Chrysler, Dodge, Ford,
GMC, Honda, Jeep, Land Rover, Mazda, Mercedes-Benz, MINI, Porsche,
RAM, Subaru, Toyota, Volkswagen, and Volvo. Once the
acquisition is completed, Group 1's consolidated brand mix is
expected to be approximately 43% luxury, 36% non-luxury import, and
21% non-luxury domestic.
"We know Prime's markets well and the opportunities they
represent. We are also proud to welcome
Prime Automotive's 1,800 employees as new teammates to
the Group 1 family. The addition of Prime Automotive
enables us to extend our reach of AcceleRide®, Group 1's
industry leading digital retailing process, to even more
customers," said Daryl
Kenningham, President of U.S. and Brazilian Operations for
Group 1 Automotive.
Group 1's Senior Vice President and Chief Financial Officer
Daniel McHenry added, "While this
transaction provides a transformation in scale for our company, our
U.S. credit facility pro-forma leverage ratio will be approximately
2.0x after taking into account the financing of this transaction
with debt and cash on hand, and liquidity remains comfortably
within our targets. This gives us the flexibility to continue
shareholder-focused capital allocation, which includes accretive
acquisitions, share repurchases, dividends, and return-driven
capital expenditures."
Year to date 2021, Group 1 has completed $420 million of acquired revenues, and with this
proposed acquisition, total acquired revenues are expected to be at
least $2.25 billion at the
anticipated closing date in late November. With the addition
of the Prime dealerships, Group 1's total U.S. dealership count
would increase to 147, which includes 46 locations in the
Northeast, and 218 locations globally.
Lazard acted as financial advisor and Vinson & Elkins L.L.P.
acted as legal advisor to Group 1 Automotive, Inc. Jefferies
LLC acted as financial advisor and Skadden, Arps, Slate, Meagher
and Flom LLP acted as legal advisor to Highline Management Inc.
For additional information about this transaction, please see
the Form 8-K that will be filed in connection with this
transaction.
ABOUT GROUP 1 AUTOMOTIVE, INC.
Group 1 owns
and operates 188 automotive dealerships, 242 franchises, and
48 collision centers in the United States, the United
Kingdom and Brazil that offer 32 brands of
automobiles. Through its dealerships, the Company sells new and
used cars and light trucks; arranges related vehicle financing;
sells service contracts; provides automotive maintenance and repair
services; and sells vehicle parts.
Investors please visit www.group1corp.com,
www.group1auto.com, www.group1collision.com, www.acceleride.com,
www.facebook.com/group1auto, and www.twitter.com/group1auto, where
Group 1 discloses additional information about the Company, its
business, and its results of operations.
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
and expectations regarding the expected benefits of the proposed
transaction, management plans, objectives for future operations,
scale and performance, integration plans and expected synergies
therefrom, the timing of completion of the proposed transaction,
our financial position, results of operations, market position,
business strategy and expectations of our management with respect
to, among other things: changes in general economic and business
conditions, including the impact of COVID-19 on the automotive
industry in general, the automotive retail industry in particular
and our customers, suppliers, vendors and business partners; our
relationships with vehicle manufacturers; operating cash flows and
availability of capital; capital expenditures; the amount of our
indebtedness; the completion of pending and future acquisitions and
divestitures; future return targets; general economic trends,
including consumer confidence levels, interest rates and fuel
prices; and automotive retail industry trends.
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 occurrence of any event, change or
other circumstances that could give rise to the termination of the
purchase agreement; the risk that the necessary regulatory or
third-party approvals may not be obtained or may be obtained
subject to conditions that are not anticipated; the risk that the
proposed transaction will not be consummated in a timely manner;
risks that any of the closing conditions to the proposed
acquisition may not be satisfied or may not be satisfied in a
timely manner; risks related to disruption of management time from
ongoing business operations due to the proposed acquisition;
failure to realize the benefits expected from the proposed
acquisition; failure to promptly and effectively integrate the
acquisition; the effect of the announcement of the proposed
acquisition on their operating results and businesses and on the
ability of Group 1 and Prime Automotive Group to retain and hire
key personnel, maintain relationships with suppliers; our ability
to execute our business strategy; the annual rate of new vehicle
sales in the U.S.; our ability to generate sufficient cash flows;
our ability to improve our liquidity position; market factors and
the future economic environment, including consumer confidence,
interest rates, the price of oil and gasoline, the level of
manufacturer incentives and the availability of consumer credit;
the reputation and financial condition of vehicle manufacturers
whose brands we represent and our relationships with such
manufacturers, and their ability to design, manufacture, deliver
and market their vehicles successfully; significant disruptions in
the production and delivery of vehicles and parts for any reason,
including natural disasters, affecting the manufacturers whose
brand we sell; our ability to enter into, maintain or renew our
framework and dealership agreements on favorable terms; the
inability of our dealership operations to perform at expected
levels or achieve expected return targets; our ability to
successfully integrate recent and future acquisitions; changes in,
failure or inability to comply with, laws and regulations governing
the operation of automobile franchises, accounting standards, the
environment and taxation requirements; our ability to leverage
gains from our dealership portfolio; high levels of competition in
the automotive retailing industry which may create pricing
pressures on the products and services we offer; our ability to
execute our capital expenditure plans; our ability to comply with
our debt or lease covenants and obtain waivers for the covenants as
necessary; and any negative outcome from any future litigation.
These risks, uncertainties and other factors are disclosed in Group
1'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.
Investor contacts:
Sheila
Roth
Manager, Investor Relations
Group 1 Automotive, Inc.
713-647-5741 | sroth@group1auto.com
Media contacts:
Pete
DeLongchamps
Senior Vice President, Manufacturer Relations, Financial Services
and Public Affairs
Group 1 Automotive, Inc.
713-647-5770 | pdelongchamps@group1auto.com
or
Clint Woods
Pierpont Communications, Inc.
713-627-2223 | cwoods@piercom.com
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SOURCE Group 1 Automotive, Inc.