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Asbury Automotive Group Inc ABG

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Megasize Dealer Acquisitions Continue With Asbury's Purchase of Larry H. Miller

Analyst Note

| David Whiston, CFA, CPA, CFE |

Asbury Automotive Group announced one of the largest ever auto dealer acquisitions on Sept. 29. In the fourth quarter, it plans to purchase the Larry H. Miller Group and LHM-affiliated finance and insurance entity Total Care Auto. LHM is America’s eighth-largest dealer group per Automotive News. We are leaving our fair value estimate unchanged as we see the deal as value neutral. The deal adds trailing 12-month revenue at June 30 of $5.7 billion, 54 new-vehicle stores, 11 collision centers, and 7 used-vehicle stores. Asbury currently has 91 locations and $8.9 billion of revenue over the same period.

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Company Profile

Business Description

Asbury Automotive Group is a regional collection of automobile dealerships that went public in March 2002. The company operates over 90 stores (will be over 150 with the Larry H. Miller acquisition) with associated parts and service departments and 25 collision centers (36 with Miller). About 80% of new-vehicle revenue is from luxury and import brands. Asbury also offers third-party financing and insurance products. Asbury operates in nine states (mostly Texas and the Southeast) and entered Colorado in 2019. Larry H. Miller stores will bring the total to 15 states. Asbury store brands include David McDavid and Park Place in Texas, Plaza in Missouri, and Nalley and Crown in the Southeastern U.S. Asbury generated $7.1 billion of revenue in 2020 and is based in the Atlanta area.

2905 Premiere Parkway North West, Suite 300
Duluth, GA, 30097
T +1 770 418-8200
Sector Consumer Cyclical
Industry Auto & Truck Dealerships
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 7,900