Shares of Asbury Automotive Group Inc. (ABG, -2.68%) surged 3.2% in premarket trading on Friday following the announcement of a major acquisition. The renowned auto retailer has confirmed its plans to acquire the Jim Koons auto dealership group for approximately $1.2 billion.
Expanding into the Mid-Atlantic Region
Asbury revealed that the Jim Koons auto dealership group is currently ranked as the ninth-largest private dealership group in the United States. With an impressive revenue of over $3 billion in 2022, this acquisition will significantly bolster Asbury’s presence in the Mid-Atlantic region.
A Transformative Acquisition
Asbury Chief Executive, David Hult, expressed his excitement for the acquisition, stating, “This acquisition is transformative for our company, enabling Asbury to further expand into one of the country’s top economies in one of its fastest-growing regions, with some of the U.S.’ best-performing dealerships.”
Financing the Deal
To fund this significant acquisition, Asbury intends to utilize its existing liquidity, credit facility, and cash reserves. The deal is anticipated to be finalized either in the fourth quarter of 2023 or early in the first quarter of 2024.
Stock Performance
Over the past three months leading up to Thursday, Asbury’s stock has experienced a 5.1% decline. Meanwhile, the S&P 500 index (SPX, -0.32%) has seen a gain of 3.7%.
