HOUSTON, Jan. 24, 2013 /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE: GPI), a Fortune 500 automotive retailer, today announced that it has entered into a definitive agreement to purchase 100 percent of the outstanding shares of UAB Motors Participacoes S.A., one of Brazil's largest automotive retailers, for approximately $47.4 million cash, 1.45 million shares of Group 1 common stock and the assumption of approximately $62 million of net non-floorplan debt. Upon closing, Group 1 will assume ownership of 100 percent interest in 18 dealerships – two Toyota, four Nissan, two BMW, two BMW/MINI, three Renault, three Peugeot, one Land Rover and one Land Rover/Jaguar. The dealerships, that include 21 franchises representing eight major brands in the Sao Paulo market and key metropolitan markets in the neighboring state of Parana, are expected to generate approximately $650 million in estimated annual revenues.
Group 1 expects the pending transaction to be modestly accretive, approximately $0.03 to $0.05, to earnings per diluted common share in 2013 excluding any associated deal costs. The acquisition is targeted to close on or about Feb. 28, 2013, and is subject to customary closing conditions, including approval from various manufacturers.
Group 1 anticipates that it will report pretax deal costs associated with this acquisition of approximately $1.5 million in its fourth-quarter 2012 results.
Based in Sao Paulo, Brazil, UAB's operations include 18 dealerships with 21 franchises, as well as five collision centers, located in the Sao Paulo metro market and the adjacent state of Parana. The franchises include current Group 1 brands Toyota, Nissan, BMW and MINI, and will add four new brands – Renault, Peugeot, Land Rover and Jaguar – to Group 1's portfolio. In Brazil, UAB is one of the largest sellers of Nissan and Peugeot vehicles and is a top five retailer of BMW, MINI and Land Rover vehicles. The business will continue to be operated by the current management team, with UAB's chairman, Lincoln da Cunha Pereira Filho, reporting directly to Earl J. Hesterberg, Group 1's president and chief executive officer. As part of the transaction, Group 1 will appoint Pereira to its board of directors, expanding its membership to eight.Brazil is the fourth largest new vehicle market in the world, with annual sales of 3.8 million units in 2012. Brazil also has one of the lowest vehicle-to-population ratios among the developing markets, providing a strong foundation for future growth in the market. "Group 1 is delighted by the opportunity of expanding into Brazil, a fast-growing automotive market, by adding these great brands and the successful UAB operating team to our company," said Earl J. Hesterberg, Group 1's president and chief executive officer. "To enter one of the largest auto markets in the world with a well-established retail infrastructure and management team provides Group 1 and our shareholders with an incredible growth opportunity. We are also excited to further expand our relationships with some of our key manufacturer partners to the Brazilian market. As this market continues to evolve, we are confident that we can add value in the area of used vehicles, parts, service and the overall application of technology and processes." Barclays acted as the exclusive advisor to Group 1 on this transaction. Jones Day and Mattos Filho acted as legal counsel to Group 1 on this transaction. Conference CallGroup 1's senior management will host a conference call on Friday, Jan. 25, at 10:00 a.m. ET to discuss the pending acquisition transaction. The conference call will be simulcast live on the Internet at www.group1auto.com, then click on 'Investor Relations' and then 'Events' or through this link: http://www.group1corp.com/news/events.aspx. A replay will be available for seven days. A slide presentation will also be posted to the Events page prior to the call. The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV