PENSKE AUTOMOTIVE GROUP COMPLETES RYBROOK ACQUISITION EXPANDING PRESENCE IN THE UNITED KINGDOM

Rhea-AI Summary

Penske Automotive Group, Inc. (NYSE: PAG) has acquired Rybrook Group Limited, adding 15 premium dealerships in the United Kingdom, including BMW, MINI, Volvo, Land Rover, and Porsche dealerships, with estimated annualized revenues of $1 billion.

Insights

Market Research Analyst

The acquisition of Rybrook Group Limited by Penske Automotive Group represents a strategic expansion within the automotive retail sector. The addition of 15 premium dealerships, which include high-value brands such as BMW, MINI, Volvo, Land Rover and Porsche, indicates a significant increase in Penske's market presence in the United Kingdom. This move is likely to enhance the company's revenue streams and diversify its portfolio, which is essential in the dynamic automotive market.

From a market perspective, the estimated annualized revenue of $1 billion from these dealerships suggests a substantial impact on Penske's financial performance. Investors will be interested in monitoring how this acquisition affects the company's profit margins, considering that premium brands often come with higher operational costs but also offer greater profit potential due to higher pricing power and customer loyalty.

Financial Analyst

Examining the financial implications of Penske Automotive Group's acquisition, the estimated $1 billion in annualized revenue is a notable boost to the company's top-line growth. It is important to analyze the acquisition cost, the debt incurred if any and the expected time frame for return on investment. Investors should consider the integration costs and how the acquisition will affect the company's earnings per share (EPS).

Long-term benefits may include economies of scale and improved bargaining power with manufacturers, potentially leading to better inventory acquisition costs. However, potential drawbacks could include integration challenges and market saturation risks. The premium segment's sensitivity to economic downturns should also be considered, as it may affect future revenue stability.

Automotive Industry Expert

The acquisition of premium dealerships aligns with industry trends where consolidation is becoming increasingly common. Penske's choice of brands reflects a focus on luxury vehicles, which have maintained a resilient consumer base even in fluctuating economic conditions. The inclusion of Motorrad motorcycles expands Penske's reach into the motorcycle segment, potentially tapping into a different consumer demographic.

It is crucial to evaluate the synergy between Penske's existing operations and the newly acquired dealerships. The ability to maintain the high level of customer service that premium brand customers expect will be a critical factor in realizing the full potential of this acquisition. Additionally, the impact on local competition and market share dynamics within the UK automotive retail market should be assessed.

Adds 15 Premium Dealerships Representing Estimated Annualized Revenue of $1 Billion

BLOOMFIELD HILLS, Mich., Jan. 8, 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, today announced that it has completed the acquisition of Rybrook Group Limited consisting of 15 premium dealerships in the United Kingdom, including four BMW dealerships, four MINI dealerships, four Volvo dealerships, two Land Rover dealerships and one Porsche dealership.  Three of the BMW locations also retail BMW Motorrad motorcycles. The dealerships represent estimated annualized revenues of $1 billion.

Darren Edwards, CEO of the Company's Sytner Group subsidiary in the U.K., said, "We are pleased to expand our brand footprint and increase our scale.  The Rybrook dealerships represent exceptional brands with a strong commitment to providing outstanding customer service. We look forward to continuing this legacy and welcome the Rybrook associates to our team."

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, and Japan 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 28,000 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 Fortune 500, Russell 1000, Russell 3000 index and S&P 400 Mid Cap Indexes. For additional information, including the Company's 2023 Corporate Responsibility Report highlighting its ESG 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 acquisitions and growth plans.  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 risks and uncertainties 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, 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, the shortage of vehicle components, 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; 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, potential decreases in the resale value of used vehicles which may affect PTS' ability to sell its used vehicles after the expiration of its customers' leases or at the end of its holding period for rental vehicles, which may affect PTS' profitability and regulatory risks and related compliance costs; our ability to realize returns on our significant capital investment 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 automotive and commercial truck 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, 2022, its Form 10-Q for the quarterly periods ended March 31, 2023, June 30, 2023, September 30, 2023, 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 did Penske Automotive Group, Inc. (NYSE: PAG) announce?

Penske Automotive Group, Inc. (NYSE: PAG) announced the completion of the acquisition of Rybrook Group Limited, adding 15 premium dealerships in the United Kingdom.

What brands are included in the acquired dealerships?

The acquired dealerships include BMW, MINI, Volvo, Land Rover, and Porsche dealerships.

What is the estimated annualized revenue of the acquired dealerships?

The acquired dealerships represent estimated annualized revenues of $1 billion.

Who is the CEO of Penske Automotive Group, Inc.'s Sytner Group subsidiary in the U.K.?

Darren Edwards is the CEO of the Company's Sytner Group subsidiary in the U.K.

What is the CEO's statement regarding the acquisition?

Darren Edwards stated that they are pleased to expand their brand footprint and increase their scale with the acquisition of Rybrook dealerships.