Asbury (ABG) to Buy Jim Koons to Expand in Mid-Atlantic Region
Asbury Automotive Group, Inc. ABG signed a contract to acquire Jim Koons Automotive Companies, one of the 10 largest privately owned dealership groups in the United States. The deal is valued at $1.2 billion and Asbury plans to fund the acquisition with its existing liquidity, credit facility and cash on hand. Jim Koons currently has 20 dealerships, 29 franchises and six collision centers in the United States and registered total sales of nearly $3 billion in 2022. It is also one of the highest-volume Toyota and Stellantis dealerships in the United States.
Asbury currently has 138 dealerships and 32 collision repair centers. Kerrigan Advisors represented Koons in the transaction. The transaction is expected to be completed by the fourth quarter of 2023 or the first quarter of 2024.
Jim Koons was founded in 1973. It comprises top-volume franchises, including Toyota, Lexus, Mercedes-Benz, Ford, Kia, Hyundai, Volvo, Stellantis and General Motors.
David Hult, president and CEO of Asbury, said that the acquisition will enable Asbury to expand into one of the U.S.’s top economies. Koons holds an exceptional track record in sales, CSI and revenues across its 20 dealerships. Hult added that Asbury expects Koons dealership’s profitability to be in line with that of Asbury’s.
Asbury witnessed massive revenue growth from 2017 to 2022. In this period, sales jumped from $6.5 billion to $15.4 billion.
Strategic buyouts are helping the auto retailer increase its market share and boost its portfolio. Asbury’s ambitious plan to generate $32 billion in revenues by 2025 instills optimism.
Zacks Rank & Key Picks
ABG currently carries a Zacks Rank #3 (Hold).
Some top-ranked players in the auto space include Oshkosh Corporation OSK, Gentex Corporation GNTX and Allison Transmission Holdings, Inc. ALSN, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for OSK’s 2023 sales and earnings implies year-over-year growth of 15% and 126.9%, respectively. The EPS estimate for 2023 and 2024 has moved north by 23 cents and 18 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for GNTX’s 2023 sales and earnings indicates year-over-year rises of 17.3% and 29.4%, respectively. The EPS estimate for 2023 and 2024 has moved up by 2 cents and 3 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for ALSN’s 2023 sales and earnings suggests year-over-year increases of 9.4% and 25.3%, respectively. The EPS estimate for 2023 and 2024 has moved up by 7 cents and 8 cents, respectively, in the past 30 days.
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Asbury Automotive Group, Inc. (ABG) : Free Stock Analysis Report
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