Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Group 1 Automotive Inc. (GPI - Snapshot Report) announced that it has entered into an agreement to purchase Brazil's largest automotive retailers UAB Motors Participacoes S.A. This acquisition is a part of the company’s strategy to expand in the fast-growing Brazilian market.

For the acquisition, Group 1 will pay around $47.4 million in cash and 1.45 million shares of Group 1 common stock. It will also assume nearly $62.0 million of UAB’s net non-floorplan debt due to the acquisition.

UAB Motors has 18 dealerships with 21 franchises, and 5 collision centers in Sao Paulo metro market and the key metropolitan markets in the adjacent state of Parana. It will complement the Group 1’s existing brands of Toyota Motor Corporation (TM - Analyst Report) with 2 dealerships, Nissan Motor Co. Ltd. (NSANY) with 4 dealerships, BMW with 4 dealerships and BMW/MINI with 2 dealerships. It will also add four new brands – Renault (3 dealerships), Peugeot (3 dealerships), Land Rover (1 dealership) and Jaguar (1 dealership) to Group 1’s portfolio.

The acquired dealerships are expected to generate $650.0 million in estimated annual revenues and will boost earnings per share by 3 cents to 5 cents in 2013. However, the acquisition will lead to $1.5 million in pre-tax deal costs in the fourth quarter of 2012. The deal is expected to close on Feb 28.

Houston, Texas-based Group 1 Automotive is one of the largest automotive retailers in the U.S., which sells new and used cars and light trucks; arranges vehicle financing, service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts.

In the third quarter of 2012, the company posted an impressive 30.7% increase in earnings per share to $1.32 from $1.01 in the prior-year quarter. Earnings per share exceeded the Zacks Consensus Estimate by a penny.

Revenues for the quarter went up 25.9% to $2.0 billion from the year-ago quarter. The growth in revenues was driven by strong retail new vehicle and used vehicle unit sales. The company now has a Zacks Rank #2 (Buy).

Lithia Motors Inc. (LAD - Snapshot Report), with a Zacks Rank #1 (Strong Buy), is performing well in the same industry where Group 1 operates.
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%