Group 1 to Acquire UAB Motors - Analyst Blog
January 29 2013 - 6:30AM
Zacks
Group 1 Automotive Inc. (GPI) announced that it
has entered into an agreement to purchase Brazil's largest
automotive retailers UAB Motors Participacoes S.A. This acquisition
is a part of the company’s strategy to expand in the fast-growing
Brazilian market.
For the acquisition, Group 1 will pay around $47.4 million in cash
and 1.45 million shares of Group 1 common stock. It will also
assume nearly $62.0 million of UAB’s net non-floorplan debt due to
the acquisition.
UAB Motors has 18 dealerships with 21 franchises, and 5 collision
centers in Sao Paulo metro market and the key metropolitan markets
in the adjacent state of Parana. It will complement the Group 1’s
existing brands of Toyota Motor Corporation (TM)
with 2 dealerships, Nissan Motor Co. Ltd. (NSANY)
with 4 dealerships, BMW with 4 dealerships and BMW/MINI with 2
dealerships. It will also add four new brands – Renault (3
dealerships), Peugeot (3 dealerships), Land Rover (1 dealership)
and Jaguar (1 dealership) to Group 1’s portfolio.
The acquired dealerships are expected to generate $650.0 million in
estimated annual revenues and will boost earnings per share by 3
cents to 5 cents in 2013. However, the acquisition will lead to
$1.5 million in pre-tax deal costs in the fourth quarter of 2012.
The deal is expected to close on Feb 28.
Houston, Texas-based Group 1 Automotive is one of the largest
automotive retailers in the U.S., which sells new and used cars and
light trucks; arranges vehicle financing, service and insurance
contracts; provides automotive maintenance and repair services; and
sells vehicle parts.
In the third quarter of 2012, the company posted an impressive
30.7% increase in earnings per share to $1.32 from $1.01 in the
prior-year quarter. Earnings per share exceeded the Zacks Consensus
Estimate by a penny.
Revenues for the quarter went up 25.9% to $2.0 billion from the
year-ago quarter. The growth in revenues was driven by strong
retail new vehicle and used vehicle unit sales. The company now has
a Zacks Rank #2 (Buy).
Lithia Motors Inc. (LAD), with a Zacks Rank #1
(Strong Buy), is performing well in the same industry where Group 1
operates.
GROUP 1 AUTO (GPI): Free Stock Analysis Report
LITHIA MOTORS (LAD): Free Stock Analysis Report
NISSAN ADR (NSANY): Free Stock Analysis Report
TOYOTA MOTOR CP (TM): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Toyota Motor (NYSE:TM)
Historical Stock Chart
From Jun 2024 to Jul 2024
Toyota Motor (NYSE:TM)
Historical Stock Chart
From Jul 2023 to Jul 2024