Group 1 Automotive GPI announced the acquisition of a Mercedes-Benz dealership in Georgetown, TX. The dealership is located in the greater Austin metropolitan area.
The dealership will continue to operate as a Mercedes-Benz outlet and is expected to generate $100 million in annual revenues. It also includes Mercedes-Benz Sprinter commercial vehicle and Smart car franchises.
Group 1 Automotive undertakes frequent acquisitions of dealerships and franchises. The company acquired 16 franchises in 2012 and 38 in 2013. In 2014, Group 1 Automotive took over 19 franchises which are expected to record annual revenues of $910 million. Meanwhile, the company vended 12 franchises that generated revenues of $450 million last year.
In Mar 2015, the company acquired an Audi dealership in Euless, TX, in the Dallas-Fort Worth (DFW) metropolitan area. The dealership, which will operate as DFW Audi, is expected to contribute $80 million to annual sales. In the following month, Group 1 Automotive acquired another Audi dealership – Prestige Audi – in North Miami Beach, FL. The dealership is one of the highest selling ones in the U.S. and is expected to generate $160 million of annual revenues. Notably, Group 1 Automotive presently has nine Audi dealerships across Florida, Texas, South Carolina, Massachusetts, and the U.K.
Year-to-date, the company has sold four franchises which collectively garnered approximately $30 million in annual revenues. While the disposed dealerships will lead to revenue loss, the funds from the divestments will help the company finance dealership acquisitions, which should prove more profitable in the long run.
Group 1 Automotive is one of the leading automotive retailers in the world. As of Sep 29, 2015, the company operated 200 franchises, representing 32 brands of automobiles, through 153 dealerships and 35 collision service centers in the U.S., the U.K. and Brazil.
Currently, Group 1 Automotive carries a Zacks Rank #2 (Buy). Other favorably ranked automobile stocks include Asbury Automotive Group, Inc. ABG, AutoNation Inc. AN and Lithia Motors Inc. LAD, all of which carry a Zacks Rank #2.
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