DULUTH, Ga., and BLOOMFIELD HILLS, Mich. -

Just before Labor Day weekend, Asbury Automotive Group made a financial market announcement and Penske Automotive Group boosted its international presence.

First at Asbury, the company said it issued a notice of redemption for all of its outstanding 7.625 percent Senior Subordinated Notes due in 2017.

Officials indicated the redemption date is Sept. 28,  and the redemption price is 102.542 percent of the principal amount of the notes to be redeemed, plus accrued and unpaid interest and special interest thereon, if any, to the redemption date. 

The company highlighted that it intends to use cash on hand, including proceeds from its recent offering of $100 million aggregate principal amount of additional 8.375 percent Senior Subordinated Notes due in 2020 and other available borrowings to fund the redemption.

As of late last Thursday, Asbury tabulated that approximately $143.2 million of principal amount of notes remain outstanding. 

“On and after the date of redemption, the notes will no longer be deemed outstanding and interest will cease to accrue, unless the company defaults in making the redemption payment or the paying agent is prohibited from making such payment pursuant to the terms of the indenture governing the notes,” Asbury said.

The company pointed out notice of redemption containing information required by the indenture governing the notes was sent to registered holders of the notes.

In accordance with the instructions specified in the notice of redemption, officials explained notes are to be surrendered to The Bank of New York Mellon, as trustee and paying agent, in exchange for payment of the redemption price, which will be paid on Sept. 28 as provided in the indenture governing the notes.

“This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities,” Asbury said.

Penske Completes Australian Commercial Vehicle Group Acquisition

On Friday, Penske completed the acquisition of Western Star Trucks Australia, a distributor of commercial vehicles, related spare parts and aftermarket support across Australia and New Zealand and portions of southeast Asia from Transpacific Industries Group Limited.

Penske officials said the business will continue to be managed by the existing management team.

The company indicated the purchase price of approximately $200 million includes target working capital of approximately $67 million inclusive of vehicle inventory, parts, and other assets, and is subject to a closing adjustment that is expected to be finalized in the third quarter.

Penske explained the purchase price was financed using available cash flow from operations and availability under the company’s credit and floor plan financing facilities.

The Commercial Vehicle Group is expected to generate approximately $420 to $460 million in estimated annual revenues for Penske Automotive Group.

Penske expects to incur approximately $0.02 per share in acquisition-related costs in its third quarter results.

On a proforma basis, officials highlighted the acquisition is expected to be $0.10 to $0.14 accretive per fully diluted share on an annualized basis, excluding acquisition-related costs.

Penske reiterated the Commercial Vehicle Group primarily distributes heavy and medium-duty trucks for Western Star, MAN Truck and Bus and Dennis Eagle through a network of more than 80 independent dealers while serving customers across a number of industries, including on-highway, logistics, construction, mining, manufacturing, agricultural and waste/refuse collection.

The Western Star truck brand, an affiliate of Daimler Trucks North America, is a top-three Australian heavy-duty truck brand and holds a leading position in key market segments. The MAN Truck and Bus brand is majority-owned by Volkswagen AG and is within the top six suppliers to the Australian bus market, and Dennis Eagle is a growing brand within the specialist refuse collection vehicle market.

“We are extremely pleased to complete this acquisition in such an efficient time frame,” Penske chairman Roger Penske said. “We believe that our existing relationships with heavy and medium-duty truck manufacturers, our experience in operating distribution and dealership-related businesses, strong market dynamics and multiple growth options augment this business opportunity.

“Further, The Commercial Vehicle Group provides us with an attractive gateway to enhance our global business profile while potentially providing a stepping-stone to southeast Asian markets for other parts of our business,” he went on to say.

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