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Asbury to drive off with Park Place’s assets
Posted on Tuesday, 07 July 2020 10:53
Asbury Automotive has signed off on a deal to buy certain units of US-based luxury car dealer Park Place Dealerships for USD 735.00 million.
The consideration includes USD 685.00 million of goodwill and around USD 50.00 million for parts, fixed assets and leaseholds.
Based on the purchase price, the deal represents a multiple of 7.7x the target’s earnings before interest, taxes, depreciation and amortisation of USD 95.00 million, as well as run-rate savings of at least USD 20.00 million.
The assets to be acquired include 12 new vehicle franchises In the Dallas/Fort Worth market, namely Jaguar, Lexus, Porsche and Volvo.
Asbury will also pick up Park Place’s auction and two collision centres.
Subject to customary closing conditions, the deal is expected to complete in the third quarter of 2020.
The transaction is expected to increase Asbury’s geographic mix and allow the company to generate 28.0 per cent of its revenue from the Texas market, as well as 49.0 per cent of its turnover from luxury brands.
Headquartered in Dallas, Park Place is billed as one the largest luxury car dealership groups in the US.
The company, which sells a range of new, commercial and pre-owned vehicles, houses franchises such as Porsche and Jaguar.
It works with a variety of dealerships across the US and generates 38.0 per cent of its turnover from the Mercedes-Benz brand, alone.
David Hult, chief executive of Asbury, said: “This acquisition will enhance our total portfolio and add approximately USD 1.70 billion in expected annualised revenues.”
Furthermore, the buyer expects the transaction to generate USD 10.00 million in annual good tax savings from goodwill amortisation.
This is not the first time Asbury has made a deal with Park Place; in March this year, the company snapped up certain assets from the latter for USD 1.00 billion.
Zephyr, the M&A database published by Bureau van Dijk, shows there have been 28 deals targeting automobile and other motor vehicle merchant wholesalers announced globally in 2020 to date.
In the largest of these, China-based Zhongsheng Group Holdings issued convertible bonds worth CNY 4.56 billion (USD 648.20 million).
© Zephus Ltd