Asbury Automotive Group Inc. spent $2.7 million in the fourth quarter of 2021 on a significant acquisition that did not materialize. This purchase was partly in anticipation of the sale of nine North Carolina stores, which generated $322 million in proceeds. CEO David Hult said that the target was “very healthy” in size, but not as large as the $3.2 billion acquisition of Larry H. Miller Dealerships in December 2021. The failed acquisition contributed to Asbury’s decision to sell the North Carolina stores.
Asbury’s goal is to reach $32 billion in annual revenue by 2025, and they are looking to acquisitions to help them reach that goal. They had $1.5 billion in liquidity and a debt ratio of 1.7 times earnings at the end of the fourth quarter, giving them a large capacity to purchase dealerships or buy back stock. Asbury bought 1.6 million shares of their own stock for a combined $300 million in 2022, and their board has approved the purchase of an additional $200 million in stock.
Asbury Automotive Group Inc. has proven to be a successful and reliable dealership group, ranking fifth on Automotive News’ list of the top 150 dealership groups based in the U.S. and retailing 109,910 new vehicles in 2021. Despite the failed acquisition in the fourth quarter, Asbury remains in a good place for 2023 with their access to cash and low debt. With their goal of reaching $32 billion in annual revenue by 2025, Asbury is looking to acquisitions to help them reach that goal and continue to be a successful and reliable dealership group.
