Asbury Automotive Group Inc said on Wednesday it would buy Larry H. Miller Dealerships to expand into six fast-growing western U.S. states, as retailers continue to benefit from higher prices due to tight inventory.
Larry H. Miller owns 54 new- and seven used-vehicle dealerships which mainly sell domestic brands and will complement Asbury’s 91, helping it get a foothold in Arizona, Utah, New Mexico, Idaho, California and Washington.
The acquisition comes as auto dealers are unable to keep up with demand for new and used cars, helping them raise prices and reap record profits.
Duluth, Georgia-based Asbury is also buying auto service provider Total Care Auto and will pay a combined $3.2 billion for both companies. Asbury did not immediately disclose a break-up.
The purchase price includes about $740 million of real estate assets, it added.
Larry H. Miller and Total Care Auto-generated EBITDA of about $360 million for the year ended June 30, Asbury said. Asbury’s EBITDA was $664.6 million.
Both deals are expected to add to Asbury’s earnings next year.
BofA Securities served as financial advisor to Asbury on the deals, which are expected to close in the fourth quarter.
Source: Reuters.com