Penske Automotive Group, Inc. PAG announced that it has acquired a 49% equity ownership interest in the Nicole Group. This is a luxury dealership group that operates in Kanagawa and Tokyo, Japan.
The Nicole dealership group operates 4 BMW and 3 MINI dealerships, along with a Rolls-Royce and a Ferrari dealership, 2 stand-alone service centers and 2 pre-owned showrooms. The group is also the exclusive importer and distributor of BMW Alpina vehicles for Japan.
With this stake buy, Penske Automotive has entered the Japanese market with a strong and established local partner. The company expects to benefit from the strength of the luxury dealership group’s existing business in addition to expanding further through growth and acquisitions.
Penske Automotive will consider this ownership interest as an equity investment. The company aims to boost earnings by expanding its dealership network. In Jan 2015, Penske Automotive acquired a Land Rover dealership in Darien, CT, which is anticipated to generate annual revenues of $50 million. In Feb 2015, the company completed the acquisition of Freightliner medium- and heavy-duty commercial truck dealerships operating in the Chattanooga and Knoxville, TN markets. With this, the company expanded its commercial truck dealership footprint in these new markets. These dealerships are expected to add annual revenues of $200 million. The company believes that there are further acquisition opportunities for its retail commercial vehicle dealership operations in the U.S. and commercial vehicle distribution operations in Australia.
In Nov 2015, Penske Automotive announced the acquisition of Audi Eatontown, Porsche Monmouth, Jaguar Monmouth and Land Rover Monmouth in Monmouth County, NJ, from the Schneider Nelson Auto Group. These four franchises are expected to record annual sales of around 2,400 new and used vehicles and annual revenues of around $175 million. The acquisition will enhance the company’s premium/luxury brand mix.
Penske Automotive currently carries a Zacks Rank #3 (Hold). Some better-ranked automobile stocks include Asbury Automotive Group, Inc. ABG, Lithia Motors Inc. LAD and Autoliv, Inc. ALV, all carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment