Shares of automotive retail and service company Asbury Automotive Group, Inc. (ABG) are rising more than 7% Tuesday morning on the news of its decision to acquire certain assets of Park Place Dealerships, one of the country’s largest luxury dealer groups.
The deal, which is expected close by end of August, is expected to add to Asbury’s 2021 earnings, and also approximately $1.7 billion to its annual revenues.
The consideration comprises $685 million of goodwill and about $50 million for parts, fixed assets, and leaseholds, excluding vehicle inventory.
Asbury Automotive’s new and used volume improved in May and June with higher profit per vehicle and Parts and Service business also improved in June as the economy gradually opens-up, the company said. This has helped to move forward with the acquisition which it had kept on hold in March due to lack of visibility around COVID-19.
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