TM Toyota Motor Corporation

Group 1 Automotive Inc. (GPI) revealed that it has closed the previously announced acquisition of the Brazil’s largest automotive retailers UAB Motors Participacoes S.A. The company has purchased 100% of the outstanding shares and interest in 18 dealerships of UAB for about $47.4 million cash and 1.45 million shares of its common stock along with the assumption of roughly $62 million of net non-floor plan debt.

UAB Motors has 18 dealerships with 22 franchises, representing eight major brands and five collision centers in the 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 franchises, Nissan Motor Co. Ltd. (NSANY) with 4 franchises, BMW with 4 franchises and MINI with 2 franchises. It will also add four new brands – Renault with 3 franchises, Peugeot with 3 franchises, Land Rover with 2 franchises and Jaguar with 2 franchises 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. Group 1 expects to incur about $6.5 million in costs related to the deal in the first quarter of the year. The business will continue to be operated by its existing management team.

Recently, Group 1 revealed that it has acquired four Ford Motor Co. (F) dealerships in southwest of London in the U.K. They are located in the towns of Farnborough, Guildford, Wokingham and Bracknell.

The acquisition is expected to generate about $177 million in estimated annual revenues. It will complement Group 1 Automotive’s existing five BMW/MINI dealerships in Farnborough and other market areas south and southwest of London. The dealerships will trade under the “think Ford” brand name.

In 2012, Group 1 acquired 16 franchises with estimated annual revenues of $715.0 million. The company also disposed of six franchises during the year with trailing-12-month revenues of $127.9 million.

Group 1 Automotive, a Zacks Rank #3 (Hold) stock, posted a 5.3% rise in earnings per share to 99 cents in the fourth quarter of 2012 from 94 cents in the prior-year quarter but missed the Zacks Consensus Estimate by 21 cents. Net income grew 9.4% to $24.0 million from $22.0 million in the fourth quarter of 2011.

Revenues increased 19.3% to $1.9 billion, driven by strong retail new vehicle and used vehicle unit sales. Revenues from new vehicle sales escalated 22.3% to $1.2 billion on a 20.8% increase in unit sales to 33,164 vehicles. Revenues from retailed used vehicles boosted 16.6% to $423.3 million on a 13.5% increase in unit sales to 20,180 vehicles.

Headquartered in Memorial City of Houston, Texas, Group 1 Automotive was founded in 1997. The company is one of the largest automotive retailers in U.S., which provides 31 automotive brands. It has 120 automotive dealerships, 156 franchises and 31 collision centers in the U.S. and the U.K.

 
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