Sale of ninth largest private dealership group
in the US 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, signed a
definitive agreement to acquire Jim Koons Automotive Companies, the
ninth largest privately-owned dealership group in the U.S. The sale
of the Mid-Atlantic Region company is one of the most sizable in
auto retail history, representing over $3 billion in revenue in
2022 and includes 20 dealerships, 29 franchises, six collision
centers and one of the highest volume Toyota and Stellantis
dealerships in the US. Asbury currently operates 138 dealerships,
representing 31 domestic and foreign brands, as well as 32
collision repair centers. Kerrigan Advisors was the exclusive
sell-side advisor on the transaction, representing Koons. The
transaction is subject to customary closing conditions and is
expected to close in the fourth quarter of 2023 or early in the
first quarter of 2024. Asbury plans to fund the purchase price with
its existing liquidity, credit facility and cash on hand.
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Fifty years ago, Jim Koons took over the operation of his
father’s dealership, Koons Ford in Falls Church, which had been
founded in 1964. He achieved steady growth over the years due to a
deep work ethic and a constant focus on his employees, customers,
and the community. “My parents, John and Eleanor Koons, instilled
these values from our company’s beginning. I am grateful to every
one of our customers and employees for their contribution to our
success,” said Jim Koons, Chairman of Jim Koons Automotive
Companies. “At Koons, it has always been all about people, and we
deeply appreciate Asbury’s commitment to continuing this tradition.
Our work with David Hult, and the Asbury team, gives us confidence
that not only are our customers in excellent hands, but so are our
employees, with opportunities for future growth being a part of
Asbury.”
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 CSA in the US by
population per 2020 census data. Revenue per dealership for Koons
ranked 10th overall in 2022, and 5th in the US for groups with
greater than $2 billion in revenue.
“This acquisition is transformative for our company, enabling
Asbury to further expand into one of the country’s top economies in
one of its fastest growing regions, with some of the U.S.’ best
performing dealerships,” said David Hult, Asbury's President and
Chief Executive Officer. “Koons has an impressive history of
achievement in sales, CSI and revenue across its 20 dealerships,
and is legendary for its emphasis on people – employees and
community – and for giving back. These are values that we at Asbury
share, along with the disciplined work ethic that has enabled Koons
to achieve so much success. We are proud to continue what Jim Koons
and his exceptional management team expanded upon: an unwavering
dedication to excellence in automotive retailing. We expect the
Koons dealerships’ profitability to be generally in line with the
profitability of Asbury’s dealerships.”
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. Koons
dealerships are well-regarded by automakers, consistently earning
high customer satisfaction scores and sales volumes and earning
multiple 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 is in the Ford Hall of Fame and received an honorary
doctorate from his alma mater, Northwood University. Jim Koons and
his wife, Cece are longtime philanthropists, having donated to
Bishop O’Connell High School in Arlington, Virginia, Northwood
University, Catholic Charities and The Talbot Hospice
Foundation.
“We were truly honored to represent Jim Koons Automotive
Companies, one of the most respected private dealership groups in
the US, and to have the opportunity to work with Mr. Koons on the
sale,” said Erin Kerrigan, Founder and Managing Director of
Kerrigan Advisors. “This milestone transaction, the largest since
2021, reflects the strength of the US auto retail market in 2023,
as well as the importance of family legacy and reputation to
acquiring groups. In Koons, Asbury is adding a 59-year-old business
and the top auto retail brand in the Washington-Baltimore market –
one of the most economically vibrant regions in our country.”
Kerrigan noted the dynamism of the Washington-Baltimore area: it
is the 4th largest market in US with nearly 10 million residents,
holds five of the top eight highest income earning counties based
on U.S. census surveys from 2017-2021, and is home to multiple
Fortune 500 companies, the federal government and a flourishing
tech sector.
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.
For additional information about this transaction, please see
the Form 8-K that will be filed in connection with this
transaction.
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 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 138 new vehicle dealerships, consisting of 181
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 32 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
and is recognized as one of America’s Greatest Workplaces 2023 by
Newsweek.
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, the timing of completion of the proposed
transaction, 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 occurrence of any event, change or
other circumstances that could give rise to the termination of the
asset purchase agreement; the risk that the necessary manufacturer
approvals may not be obtained; 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; the risk that the necessary
regulatory 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; and the effect
of the announcement of the proposed acquisition on their operating
results and businesses and on the ability of Asbury to retain and
hire key personnel, maintain relationships with suppliers; 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230908336123/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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