Asbury Automotive Group Inc. shares (ABG) jumped 4% in premarket trade Wednesday, after the company said it has agreed to purchase Larry H. Miller Dealerships, the eighth largest dealer group in the U.S., and Total Care Auto, powered by Landcar, in a deal valued at $3.2 billion. The deal is expected to close in the fourth quarter and to add about $5.7 billion to annualized revenue. "This acquisition is a unique opportunity to rapidly expand Asbury's presence into these desirable, high-growth Western markets with strong accretion from day-one, with this impressive group and its rich history," Chief Executive David Hult said in a statement. Asbury will gain entry to six Western states, namely Arizona, Utah, New Mexico, Idaho, California, and Washington, and add to its growing Colorado footprint. The assets acquired include 54 new vehicle dealerships, seven used vehicle dealerships and 11 collision centers. Larry H. Miller sells more than 115,000 new and used vehicles every year. The deal is expected to boost Asbury Automotive's per-share earnings by 14% in 2022, assuming equity financing of $600 million, rising to 20% by 2024. The company has other strategic acquisitions under contract that are expected to add another roughly $900 million in annualized revenue, which will be about 20% accretive to 2022 EPS. Shares have gained 39% in the year to date, while the S&P 500 has gained 16%.
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