Analyst Note| David Whiston, CFA, CPA, CFE |
On the evening of Nov. 12, Group 1 announced an agreement for the sale of its Brazilian operations for BRL 510 million (about $93.5 million) to Original Holdings S.A., an affiliate of Simpar S.A., a publicly listed holding company in Brazil that owns auto dealerships as well as car rental operations and truck logistics services. Group 1 says it has 16 dealerships in Brazil while Simpar’s release says it’s buying 20 stores. We think the difference is collision centers. Group 1’s time in Brazil goes back to its February 2013 acquisition of UAB that we estimate it paid about $131 million for in cash and stock. We are leaving our fair value estimate in place as modeling the deal does not result in a material change to our valuation. Management expects the deal to close before the end of second quarter 2022 and it is still subject to automaker approval.