Asbury Automotive Wins Preliminary Injunction Against CDK Global LLC

Rhea-AI Summary

Asbury Automotive Group (NYSE: ABG) has won a preliminary injunction against CDK Global in a lawsuit filed in Georgia. The court order directs CDK to transfer data for four Asbury dealerships to Tekion Corp., a competitor in Dealership Management System (DMS) services, as part of Asbury's pilot program. CDK had previously refused to transfer the data.

Barry Cohen, VP and CIO at Asbury, expressed satisfaction with the decision, stating it allows them to test products that improve the car-buying and servicing experience. Asbury, a Fortune 500 company, operates 153 new vehicle dealerships with 202 franchises across 31 brands. The company also runs Total Care Auto and 37 collision repair centers, offering a wide range of automotive products and services.

Positive

• Court order allows Asbury to proceed with its pilot program using Tekion's DMS
• Potential for improved car-buying and servicing experience through testing new business products
• Asbury operates a large network of 153 new vehicle dealerships with 202 franchises

Negative

• Legal dispute with CDK Global , a major DMS provider
• Potential disruption in dealership operations during the data transfer process

Insights

Legal Expert

This court order represents a significant victory for Asbury Automotive in its dispute with CDK Global. The preliminary injunction requires CDK to transfer dealership data to Tekion, a competitor, for Asbury's pilot program. This decision has several important implications:

• It potentially weakens CDK's market position by forcing data sharing with a competitor.
• It allows Asbury to explore alternative DMS providers, which could lead to cost savings or improved services.
• The ruling sets a precedent that could impact similar disputes in the automotive retail industry.

While this is a positive development for Asbury, it's important to note that this is a preliminary injunction, not a final ruling. The case may continue and the long-term impact remains to be seen. However, this decision gives Asbury more leverage in its relationship with DMS providers and potentially more flexibility in its technology choices.

Market Research Analyst

This development is significant for Asbury Automotive and the broader automotive retail sector. By winning this injunction, Asbury demonstrates its commitment to innovation and improving customer experience. Key points to consider:

• The ability to test new DMS providers could lead to operational efficiencies and cost savings for Asbury.
• If successful, the pilot program with Tekion could result in a larger rollout, potentially disrupting the DMS market.
• This move aligns with Asbury's strategic plan to increase revenue and profitability through innovative technologies.
• The outcome may encourage other dealerships to challenge their DMS providers, potentially leading to more competition and innovation in the sector.

For investors, this represents a positive signal about Asbury's management and their proactive approach to technology adoption and vendor relationships. It could potentially lead to improved margins and competitive advantages in the long term.

Judge Directs DMS Provider to Transfer Data to a Competitor for Asbury Pilot Program

DULUTH, Ga.--(BUSINESS WIRE)-- Asbury Automotive Group (NYSE: ABG) (“Asbury”) one of the largest automotive retail and service companies in the United States, announced today the entry of a court order directing CDK Global LLC (“CDK”) to provide data for four Asbury dealerships to Tekion Corp. (“Tekion”) as part of a pilot program initiated by Asbury at the dealerships. The court’s order followed the filing of a lawsuit by Asbury in the Superior Court of Gwinnett County, Georgia. Prior to the entry of the order, CDK had refused to transfer the dealerships’ data to Tekion, which competes with CDK in providing Dealership Management System (“DMS”) services to automotive dealerships. DMS services are used by automotive dealerships to manage their day-to-day business activities.

“We are pleased we can proceed with this pilot program despite the roadblocks raised by CDK,” said Barry Cohen, Vice President and Chief Information Officer at Asbury. “Our guests and team members are well served when we are free to test business products that make the car-buying and servicing experience better.”

About Asbury Automotive Group, Inc.

Asbury Automotive Group, Inc. (NYSE: ABG), a Fortune 500 company headquartered in Duluth, GA, is one of the largest automotive retailers in the U.S. In late 2020, Asbury embarked on a multi-year plan to increase revenue and profitability strategically through organic operations, acquisitive growth and innovative technologies, with its guest-centric approach as Asbury’s constant North Star. As of September 30, 2024, Asbury operated 153 new vehicle dealerships, consisting of 202 franchises, representing 31 domestic and foreign brands of vehicles. Asbury also operates Total Care Auto, Powered by Landcar, a leading provider of service contracts and other vehicle protection products, and 37 collision repair centers. Asbury also operates Total Care Auto, Powered by Landcar, a leading provider of service contracts and other vehicle protection products. Asbury offers an extensive range of automotive products and services, including new and used vehicles; parts and service, which includes vehicle repair and maintenance services, replacement parts and collision repair services; and finance and insurance products, including arranging vehicle financing through third parties and aftermarket products, such as extended service contracts, guaranteed asset protection debt cancellation, and prepaid maintenance. Asbury ranks 18th in the 2023 Forbes list of America’s Best Mid-Sized Companies. Asbury is recognized as one of America’s Fastest Growing Companies 2024 by the Financial Times, America’s Greatest Workplaces 2023 by Newsweek, as well as one of the Best Companies to Work For in the Retailers industry by U.S. News & World Report.

For additional information, visit www.asburyauto.com.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical fact, and may include statements relating to goals, plans, objectives, beliefs, expectations and assumptions with respect to Asbury’s lawsuit against CDK and the potential impact of such lawsuit, projections regarding Asbury's financial position, liquidity, results of operations, cash flows, leverage, market position, the timing and amount of any stock repurchases, and dealership portfolio, revenue enhancement strategies, operational improvements, projections regarding the expected benefits of Clicklane, management’s plans, projections and objectives for future operations, scale and performance, integration plans and expected synergies from acquisitions, capital allocation strategy, business strategy. These statements are based on management's current expectations and beliefs and involve significant risks and uncertainties that may cause results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, adverse outcomes with respect to current and future litigation and other proceedings, including, without limitation, the lawsuit against CDK, our inability to realize the benefits expected from recently completed transactions; our inability to promptly and effectively integrate completed transactions and the diversion of management’s attention from ongoing business and regular business responsibilities; our inability to complete future acquisitions or divestitures and the risks resulting therefrom; any supply chain disruptions impacting our industry and business, market factors, Asbury's relationships with, and the financial and operational stability of, vehicle manufacturers and other suppliers, acts of God, acts of war or other incidents and the shortage of semiconductor chips and other components, which may adversely impact supply from vehicle manufacturers and/or present retail sales challenges; risks associated with Asbury's indebtedness and our ability to comply with applicable covenants in our various financing agreements, or to obtain waivers of these covenants as necessary; risks related to competition in the automotive retail and service industries, general economic conditions both nationally and locally, governmental regulations, legislation, including changes in automotive state franchise laws, and Asbury's ability to execute its strategic and operational strategies and initiatives, including its five-year strategic plan, Asbury's ability to leverage gains from its dealership portfolio, Asbury's ability to capitalize on opportunities to repurchase its debt and equity securities or purchase properties that it currently leases, and Asbury's ability to stay within its targeted range for capital expenditures. There can be no guarantees that Asbury's plans for future operations will be successfully implemented or that they will prove to be commercially successful.

These and other risk factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements are and will be discussed in Asbury's filings with the U.S. Securities and Exchange Commission from time to time, including its most recent annual report on Form 10-K and any subsequently filed quarterly reports on Form 10-Q. These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this press release. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241002451003/en/

Investors & Reporters May Contact:

Joe Sorice

Manager, Investor Relations

(770) 418-8211

ir@asburyauto.com

Source: Asbury Automotive Group

FAQ

What was the outcome of Asbury Automotive Group's lawsuit against CDK Global ?

Asbury Automotive Group (NYSE: ABG) won a preliminary injunction, with the court directing CDK Global to transfer data for four Asbury dealerships to Tekion Corp. as part of Asbury's pilot program.

Why did Asbury Automotive Group (ABG) file a lawsuit against CDK Global ?

Asbury filed the lawsuit because CDK Global had refused to transfer dealership data to Tekion Corp., a competitor in Dealership Management System (DMS) services, for Asbury's pilot program.

How many new vehicle dealerships does Asbury Automotive Group (ABG) operate as of September 30, 2024?

As of September 30, 2024, Asbury Automotive Group (NYSE: ABG) operated 153 new vehicle dealerships, consisting of 202 franchises representing 31 domestic and foreign brands of vehicles.

What other services does Asbury Automotive Group (ABG) offer besides new vehicle sales?

Asbury Automotive Group (NYSE: ABG) offers used vehicle sales, parts and service, collision repair services, finance and insurance products, and operates Total Care Auto, which provides service contracts and other vehicle protection products.