PENSKE AUTOMOTIVE GROUP ACQUIRES BILL BROWN FORD

Rhea-AI Summary

Penske Automotive Group (NYSE: PAG) has acquired Bill Brown Ford in Livonia, Michigan, expanding its North American retail operations. The acquisition is expected to add $550 million in estimated annualized revenue. PAG will acquire over 200,000 square feet of facilities across 29 acres, including a main dealership, pre-owned facility, fleet maintenance center, and collision center.

Bill Brown Ford is an 18-time recipient of the Ford President's Award. This acquisition strengthens PAG's relationship with Ford and expands its Midwest presence. Year-to-date 2024, PAG has completed acquisitions representing nearly $2 billion in estimated annualized revenue. The company operates dealerships across four continents and nine countries, employing over 28,500 people worldwide.

Positive

• Acquisition expected to add $550 million in estimated annualized revenue
• Expands PAG's presence in the Midwest and strengthens relationship with Ford
• Acquires over 200,000 square feet of facilities across 29 acres
• Year-to-date acquisitions represent nearly $2 billion in estimated annualized revenue

Negative

• None.

Insights

Financial Analyst

Penske Automotive Group's acquisition of Bill Brown Ford in southeastern Michigan is a meaningful development. Acquisitions generally carry significant implications for cash flow, asset base and market position. The addition of $550 million in estimated annualized revenue is substantial, potentially increasing Penske's overall revenue base by nearly 10%, assuming an approximate revenue of $5 billion annually. This scale of integration could yield both short-term and long-term synergies. In the short term, investors may see enhanced revenue streams and potentially better economies of scale. In the long term, the strategic acquisition may enhance Penske's footprint in a key geographical area, providing sustained growth and market presence.

However, investors should remain cautious about the integration process, which often involves unforeseen costs and challenges. Monitoring subsequent earnings reports for any integration-related expenses or operational disruptions will be crucial. Additionally, the dealership's historical performance and awards suggest a high level of operational efficiency and customer satisfaction, which could bode well for maintaining revenue projections.

Market Research Analyst

From a market research perspective, this acquisition enhances Penske Automotive Group's presence in the Midwest, a region known for its robust automotive market. Michigan, being an automotive hub, offers strategic advantages. The acquisition of over 200,000 square feet of facilities across 29 acres is noteworthy. This extensive infrastructure indicates that Penske is positioning itself to optimize dealership operations, including pre-owned vehicle sales, fleet maintenance and collision repair services. Such a diverse set of services can attract a wide audience, potentially boosting foot traffic and sales.

Additionally, Bill Brown Ford's reputation, marked by its 18 Ford President's Awards, signifies high customer satisfaction and operational excellence. This accolade could translate into strong brand loyalty and repeat business, which are critical factors for long-term growth. It's important to note that customer service excellence often leads to higher profit margins due to repeat customers and word-of-mouth referrals.

Expands North America Retail Operations Presence in the Midwest

Expected to Add $550 Million in Estimated Annualized Revenue

BLOOMFIELD HILLS, Mich., July 16, 2024 /PRNewswire/ -- Penske Automotive Group, Inc. (NYSE: PAG), a diversified international transportation services company and one of the world's premier automotive and commercial truck retailers with operations across four continents and nine countries, announced today the acquisition of Bill Brown Ford in southeastern Michigan.  Located in Livonia, the dealership operations serve Michigan's largest county by population.  The acquisition is expected to add $550 million in estimated annualized revenue.

As part of the acquisition, the Company will acquire over 200,000 square feet of existing facilities across 29 acres, including a main dealership premises, a pre-owned facility, a fleet maintenance center and a collision center.  Bill Brown Ford is proudly an 18-time recipient of the Ford President's Award, representing a commitment to the highest level of performance, customer service and satisfaction. 

Commenting on the acquisition, Penske Automotive Group North American Operations Officer Rich Shearing said, "We are pleased to expand our retail automotive footprint in the Midwestern U.S. and our relationship with Ford.  For decades, Bill Brown Ford has been building partnerships within its community by creating an environment that focuses on exceeding the expectations of its customers and empowering its employees.  We look forward to cultivating those partnerships and welcome the employees of Bill Brown Ford to the Penske Automotive Group team."

Year-to-date 2024, Penske Automotive Group has completed acquisitions representing nearly $2 billion in estimated annualized revenue. 

About Penske Automotive
Penske Automotive Group, Inc., (NYSE: PAG) headquartered in Bloomfield Hills, Michigan, is a diversified international transportation services company and one of the world's premier automotive and commercial truck retailers. PAG operates dealerships in the United States, the United Kingdom, Canada, Germany, Italy, Japan and Australia and is one of the largest retailers of commercial trucks in North America for Freightliner. PAG also distributes and retails commercial vehicles, diesel and gas engines, power systems, and related parts and services principally in Australia and New Zealand. PAG employs over 28,500 people worldwide. Additionally, PAG owns 28.9% of Penske Transportation Solutions ("PTS"), a business that employs over 44,000 people worldwide, manages one of the largest, most comprehensive and modern trucking fleets in North America with over 442,000 trucks, tractors, and trailers under lease, rental, and/or maintenance contracts and provides innovative transportation, supply chain, and technology solutions to its customers. PAG is a member of the S&P Mid Cap 400, Fortune 500, Russell 1000, Russell 3000 indexes. For additional information, including the Company's 2023 Corporate Responsibility Report highlighting its corporate responsibility strategies, activities, and certain metrics, visit the Company's website at www.penskeautomotive.com.

Caution Concerning Forward Looking Statements
Statements in this press release may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.'s acquisition activity and future revenues. Actual results may vary materially because of risks and uncertainties that are difficult to predict. These risks and uncertainties include, among others, our ability to successfully integrate the acquired dealerships into our existing operations and obtain certain contemplated synergies, those related to macro-economic, geo-political and industry conditions and events, including their impact on new and used vehicle sales, the availability of consumer credit, changes in consumer demand, consumer confidence levels, fuel prices, demand for trucks to move freight with respect to Penske Transportation Solutions (PTS) and PTG, personal discretionary spending levels, interest rates, and unemployment rates; our ability to obtain vehicles and parts from our manufacturers, especially in light of supply chain disruptions due to natural disasters, disruptions to the security and availability of our information technology systems and those of our third party providers, which systems are increasingly threatened by ransomware and other cyber-attacks, the shortage of vehicle components, international conflicts, including the war in Ukraine, challenges in sourcing labor, or labor strikes or work stoppages, or other disruptions; changes in the retail model either from direct sales by manufacturers, a transition to an agency model of sales, sales by online competitors, or from the expansion of electric vehicles; the effects of a pandemic on the global economy, including our ability to react effectively to changing business conditions in light of any pandemic; the rate of inflation, including its impact on vehicle affordability; changes in interest rates and foreign currency exchange rates; our ability to consummate, integrate, and realize returns on acquisitions; with respect to PTS, changes in the financial health of its customers, labor strikes or work stoppages by its employees, a reduction in PTS' asset utilization rates, continued availability from truck manufacturers and suppliers of vehicles and parts for its fleet, changes in values of used trucks which affects PTS' profitability on truck sales and regulatory risks and related compliance costs, our ability to realize returns on our significant capital investments in new and upgraded dealership facilities; our ability to navigate a rapidly changing automotive and truck landscape; our ability to respond to new or enhanced regulations in both our domestic and international markets relating to dealerships and vehicles sales, including those related to the sales process or emissions standards, as well as changes in consumer sentiment relating to commercial truck sales that may hinder our or PTS' ability to maintain, acquire, sell, or operate trucks; the success of our distribution of commercial vehicles, engines, and power systems; natural disasters; recall initiatives or other disruptions that interrupt the supply of vehicles or parts to us; the outcome of legal and administrative matters, and other factors over which management has limited control. These forward-looking statements should be evaluated together with additional information about Penske Automotive Group's business, markets, conditions, risks, and other uncertainties, which could affect Penske Automotive Group's future performance. The risks and uncertainties discussed above are not exhaustive and additional risk and uncertainties are addressed in Penske Automotive Group's Form 10-K for the year ended December 31, 2023, its Form 10-Q for the three months ended March 31, 2024, and its other filings with the Securities and Exchange Commission. This press release speaks only as of its date, and Penske Automotive Group disclaims any duty to update the information herein.

Inquiries should contact:

Shelley Hulgrave	Anthony Pordon
Executive Vice President and	Executive Vice President Investor Relations
Chief Financial Officer	and Corporate Development
Penske Automotive Group, Inc.	Penske Automotive Group, Inc.
248-648-2812	248-648-2540
shulgrave@penskeautomotive.com	tpordon@penskeautomotive.com

 

 

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SOURCE Penske Automotive Group, Inc.

FAQ

What company did Penske Automotive Group (PAG) acquire in July 2024?

Penske Automotive Group acquired Bill Brown Ford, located in Livonia, Michigan, in July 2024.

How much additional annualized revenue is the Bill Brown Ford acquisition expected to generate for PAG?

The acquisition of Bill Brown Ford is expected to add $550 million in estimated annualized revenue to Penske Automotive Group.

What facilities did PAG acquire as part of the Bill Brown Ford deal?

PAG acquired over 200,000 square feet of existing facilities across 29 acres, including a main dealership premises, a pre-owned facility, a fleet maintenance center, and a collision center.

How many times has Bill Brown Ford received the Ford President's Award?

Bill Brown Ford is an 18-time recipient of the Ford President's Award, demonstrating its commitment to high performance and customer satisfaction.