Group 1 Automotive Announces Disposition of Four Dealerships
HOUSTON--June 6, 2013: Group 1 Automotive, Inc. , A Fortune 500 international automotive retailer, today announced that it has disposed of four U.S. dealerships in three separate transactions over the past three weeks. The dealerships that were sold are Miller Honda and Miller Toyota in Culver City, California; World Ford in Stone Mountain, Georgia; and Messer Mazda in Amarillo, Texas. In addition to the dealerships, the Company also disposed of the accompanying real estate associated with the Stone Mountain dealership. In total, the four dealerships generated $176.7 million in trailing-twelve-month revenues. The disposals are consistent with Group 1's strategy of portfolio management and disciplined capital expenditure management.
Earl J. Hesterberg, Group1's president and chief executive officer, said, "We continually evaluate our portfolio of dealerships relative to required future capital expenditures and current levels of return on investment. Based on that type of analysis we have decided to dispose of several dealerships and redeploy the capital to operations offering a higher future rate of return for our shareholders. We remain positive overall on the U.S. dealership environment and plan to pursue further expansion of our U.S. business in the near future."
Group 1 expects to post a one-time net pre-tax gain of approximately $8.3 million on these disposals when it reports Second Quarter earnings later in July. The company plans to exclude these gains from adjusted operating earnings.
Group 1 owns and operates 139 automotive dealerships, 178 franchises, and 35 collision centers in the United States, the United Kingdom and Brazil that offer 35 brands of automobiles. Through its dealerships, the company sells new and used cars and light trucks; arranges related vehicle financing, service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts.