Group 1 Automotive Inc 8-K, filed Nov 23, 2021
Group 1 Automotive Inc (GPI)
About this 8-K
Group 1 Automotive Inc filed this 8-K on November 23, 2021, reporting on events of November 17, 2021.
Items reported
- Item 2.01: Completed an acquisition or sale of assets
- Item 7.01: Regulation FD disclosure
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
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| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
As previously disclosed on September 13, 2021, Group 1 Automotive, Inc. (the “Company”) entered into a purchase agreement (the “Purchase Agreement”) with GPB Portfolio Automotive, LLC, Capstone Automotive Group, LLC, Capstone Automotive Group II, LLC, Automile Parent Holdings, LLC, Automile TY Holdings, LLC, and Prime Real Estate Holdings, LLC (together with their respective subsidiaries, the “Selling Entities”), pursuant to which the Company agreed to purchase substantially all of the assets related to the Prime Automotive Group car dealership business, including, but not limited to, real property (including certain equity of entities owning real property), vehicles, parts and accessories, goodwill, permits, intellectual property and substantially all contracts relating to the business of the Selling Entities. On November 17, 2021, the Company completed the purchase of certain real estate, three collision centers, and 27 Prime Automotive Group dealerships now operating under the names of: Ira Acura Westwood, Audi Westwood, BMW of Norwood, BMW South Shore, Ira Chrysler Dodge Jeep Ram, World Chrysler Dodge Jeep Ram, Ira Ford Saco, Ira Ford Auburn, Ira Buick GMC - Hanover, Staten Island Buick GMC, Rockville Centre GMC, Ira Honda, Ira Honda - Saco, Ira Honda 128, Land Rover Hanover, Ira Mazda, Mercedes-Benz of Westwood, Mercedes-Benz of Scarborough, Mercedes-Benz of Hanover, Mercedes-Benz of Manchester, South Shore MINI, Porsche Westwood, Bill Kolb, Jr. Subaru, World Subaru, Ira Volvo Cars South Shore, Volkswagen Norwood and Volkswagen Saco (the “Initial Acquisition”). On November 18, 2021, the Company completed the purchase of a 28th Prime Automotive Group dealership, Ira Toyota Saco. The aggregate consideration for all of the 28 dealership purchases was approximately $828.4 million, which amount is subject to customary post-close adjustments. In summary, of the 30 dealerships originally announced, the Company closed on 28 dealerships. One additional dealership was contracted by Prime Auto Group to be sold to a third party with the consent of the Company, and to date, one additional dealership has not received approval for transfer.
The foregoing description of the Purchase Agreement is a summary only and is qualified in its entirety by reference to the complete text of the Purchase Agreement, which was previously filed as Exhibit 2.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 filed on November 4, 2021 and incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure. |
On November 17, 2021, the Company issued a press release announcing the closing of the Initial Acquisition. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
As provided in General Instruction B.2 of Form 8-K, the information in the press release attached as Exhibit 99.1 and incorporated by reference in this Item 7.01 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
| Item 8.01 | Other Events. |
Additionally, on November 17, 2021, the Company announced that its Board of Directors increased the Company’s common stock share repurchase authorization by $116.1 million to $200.0 million. Purchases may be made from time to time, based on market conditions, legal requirements, and other corporate considerations, in the open market or in privately negotiated transactions. The Company also announced that its Board of Directors approved a cash dividend of $0.35 per share for the third quarter of 2021, payable on December 15, 2021 to stockholders of record on December 1, 2021.
| Item 9.01 | Financial Statements and Exhibits. |
(a) Financial Statements of Businesses Acquired.
Financial statements of the acquired businesses are not included in this Form 8-K report. Such financial statements will be filed within 71 calendar days after the date on which this Form 8-K report is required to be filed.
(b) Pro Forma Financial Information.
Pro forma financial information relative to the acquired businesses are not included in this Form 8-K report. Such pro forma financial information will be filed within 71 calendar days after the date on which this Form 8-K report is required to be filed.
(d) Exhibits
| Exhibit Number |
Description | |
| 99.1 | Press Release, dated November 17, 2021. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: November 23, 2021
| Group 1, Automotive, Inc. | ||
| By: | /s/ Darryl M. Burman | |
| Name: Darryl M. Burman | ||
| Title: Senior Vice President | ||
Exhibit 99.1
FOR IMMEDIATE RELEASE
Group 1 Automotive Announces Closing on Prime Automotive Group Dealerships
Increases Dividend & Share Repurchase Authorization
HOUSTON, November 17, 2021—Group 1 Automotive, Inc. (NYSE: GPI), (“Group 1” or the “Company”), an international, Fortune 500 automotive retailer with 217 dealerships located in the U.S., U.K., and Brazil, today announced an update on the acquisition of Prime Automotive Group. Additionally, the Company announced its board of directors increased the Company’s quarterly cash dividend by 2.9%, or $0.01 per share, and also increased the Company’s common stock share repurchase authorization by $116.1 million to $200.0 million.
| • | Prime Automotive Group Acquisition Update |
Through November 17, 2021, the Company has completed the purchase of substantially all the assets, including real estate, 27 Prime Automotive Group dealerships, and three collision centers.
“We are pleased to add these great brands and new teammates to our company,” said Earl J. Hesterberg, Group 1’s President and Chief Executive Officer. “This action will further leverage our cost structure, diversify our footprint, and broaden our customer base.”
Year-to-date 2021, Group 1 has completed transactions representing $2.4 billion of acquired annual revenues, growing the Company’s portfolio by 57 franchises. As previously announced, the Company anticipates the sale of the operations in Brazil to occur before the end of the second quarter of 2022.
| • | Share Repurchase Authorization Increase |
The Company announced that its board of directors increased the Company’s common stock share repurchase authorization by $116.1 million to $200.0 million. During October through November 17, 2021, subsequent to the third quarter 2021 earnings call, the Company repurchased 339,853 shares at an average price per common share of $194.86, for a total of $66.2 million. Year-to-date through November 17, 2021, the Company has repurchased 464,922 shares at an average price per common share of $182.47, for a total of $84.8 million. Purchases may be made from time to time, based on market conditions, legal requirements, and other corporate considerations, in the open market or in privately negotiated transactions. The Company expects that any repurchase of shares will be funded by cash from operations. Repurchased shares will be held in treasury.
| • | Quarterly Cash Dividend Increase |
Group 1’s board of directors also declared a cash dividend of $0.35 per share for the third quarter of 2021. The dividend represents an increase of 2.9%, or $0.01 per share, from the second quarter of 2021, and will be payable on December 15, 2021, to stockholders of record as of December 1, 2021.
Hesterberg added, “Our current financial position enables us to grow our business through acquisitions while also returning capital to shareholders.”
ABOUT GROUP 1 AUTOMOTIVE, INC.
Group 1 owns and operates 217 automotive dealerships, 287 franchises, and 52 collision centers in the United States, the United Kingdom and Brazil that offer 34 brands of automobiles. Through its dealerships, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service contracts; provides automotive maintenance and repair services; and sells vehicle parts.
Investors please visit www.group1corp.com, www.group1auto.com, www.group1collision.com, www.acceleride.com, www.facebook.com/group1auto, and www.twitter.com/group1auto, where Group 1 discloses additional information about the Company, its business, and its results of operations.
FORWARD-LOOKING STATEMENTS
To the extent that statements in this press release are not recitations of historical fact, such statements constitute “forward-looking statements” as such term is defined in the Private Securities Litigation Reform Act of 1995. The forward-looking statements in this press release may include statements relating to goals, plans and expectations regarding the expected benefits of the proposed transaction, management plans, objectives for future operations, scale and performance, integration plans and expected synergies therefrom, the timing of completion of the proposed transaction, our financial position, results of operations, market position, business strategy and expectations of our management with respect to, among other things: changes in general economic and business conditions, including the impact of COVID-19 on the automotive industry in general, the automotive retail industry in particular and our customers, suppliers, vendors and business partners; our relationships with vehicle manufacturers; operating cash flows and availability of capital; capital expenditures; the amount of our indebtedness; the completion of pending and future acquisitions and divestitures; future return targets; general economic trends, including consumer confidence levels, interest rates and fuel prices; and automotive retail industry trends.
The following are some but not all of the factors that could cause actual results or events to differ materially from those anticipated, including: the occurrence of any event, change or other circumstances that could give rise to the termination of the purchase agreement; the risk that the necessary regulatory or third-party approvals may not be obtained or may be obtained subject to conditions that are not anticipated; failure to realize the benefits expected from the proposed acquisition; failure to promptly and effectively integrate the acquisition; the annual rate of new vehicle sales in the U.S.; our ability to generate sufficient cash flows; our ability to improve our liquidity position; market factors and the future economic environment, including consumer confidence, interest rates, the price of oil and gasoline, the level of manufacturer incentives and the availability of consumer credit; the reputation and financial condition of vehicle manufacturers whose brands we represent and our relationships with such manufacturers, and their ability to design, manufacture, deliver and market their vehicles successfully; significant disruptions in the production and delivery of vehicles and parts for any reason, including natural disasters, affecting the manufacturers whose brand we sell; our ability to enter into, maintain or renew our framework and dealership agreements on favorable terms; the inability of our dealership operations to perform at expected levels or achieve expected return targets; our ability to successfully integrate recent and future acquisitions; changes in, failure or inability to comply with, laws and regulations governing the operation of automobile franchises, accounting standards, the environment and taxation requirements; our ability to leverage gains from our dealership portfolio; high levels of competition in the automotive retailing industry which may create pricing pressures on the products and services we offer; our ability to execute our capital expenditure plans; our ability to comply with our debt or lease covenants and obtain waivers for the covenants as necessary; and any negative outcome from any future litigation. These risks, uncertainties and other factors are disclosed in Group 1’s Annual Report on Form 10-K, subsequent quarterly reports on Form 10-Q and other periodic and current reports filed with the Securities and Exchange Commission from time to time.
These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this press release. We expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, whether as a result of new information, future events or otherwise.
SOURCE: Group 1 Automotive, Inc.
Investor contacts:
Sheila Roth
Manager, Investor Relations
Group 1 Automotive, Inc.
713-647-5741 | sroth@group1auto.com
Media contacts:
Pete DeLongchamps
Senior Vice President, Manufacturer Relations, Financial Services and Public Affairs
Group 1 Automotive, Inc.
713-647-5770 | pdelongchamps@group1auto.com
or
Clint Woods
Pierpont Communications, Inc.
713-627-2223 | cwoods@piercom.com