Asbury Automotive Group Announces Transactions
DULUTH, Ga., Dec. 2, 2010 /PRNewswire-FirstCall/ -- Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., today announced the closing of its acquisition of Greenville Automotive Group, which consists of Lexus, Toyota, Jaguar, Porsche, and Volvo brands operating in Greenville, South Carolina. Estimated annualized revenues related to the Greenville acquisition are approximately $125 million. Commenting on the completion of the transaction, Charles R. Oglesby, Asbury's President and CEO, stated, "We are extremely pleased to expand our presence in Greenville, a strong market within our existing geographic footprint. The group fits within our strict acquisition criteria with respect to attractive brands, geographic location, and valuation."
Additionally, Asbury announced today that it has entered into an agreement to sell its heavy truck business, Nalley Motor Trucks, to Rush Enterprises, Inc. (Nasdaq: RUSHA and RUSHB). The sale is subject to customary closing conditions, including manufacturer approvals, and is expected to close in the first quarter of 2011. As a result of the acquisition and divestiture, Asbury anticipates an increase in annualized pre-tax income from continuing operations of approximately two million dollars.
Craig T. Monaghan, Asbury's Senior Vice President and Chief Financial Officer, commented, "The sale of our heavy truck business represents a strategic decision to exit a non-core business while redeploying capital into our core automotive retailing business with greater returns."
Finally, Asbury announced today that its Board of Directors has authorized the repurchase of up to $25 million of the Company's common stock. The Company's recent refinancing activities have enabled Asbury once again to return capital to shareholders. The Company ended the third quarter of 2010 with over $79 million in cash and cash available under floor plan offset accounts.Mr. Oglesby concluded, "We continue to seek a balanced approach towards investing the Company's capital. The announcements we have made today reinforce our goal of optimizing our operating portfolio in addition to returning capital to our shareholders. Going forward, we will also look for opportunities to reduce our leverage and operating leases."
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