AutoNation’s store count now is on track to surpass 250.
The dealer group today announced that it has signed agreements to acquire 13 stores in Georgia, Alabama and Tennessee from Carl Gregory Enterprises and a trio of stores in the Baltimore market from Valley Motors Auto Group, representing over $600 million in combined annual revenue.
Officials highlighted the franchises to be acquired in the Southeast include Chrysler, Dodge, Jeep, Ram, Fiat, Ford, Lincoln, Honda, Hyundai and Volkswagen. In 2014, the Carl Gregory stores retailed approximately 16,750 new and used vehicles.
The franchises to be acquired from Valley Motors Auto Group include Audi, Mercedes-Benz, Subaru and Volkswagen. The Valley Motors Auto Group stores retailed approximately 2,900 new and used vehicles in 2014.
Once these transactions are completed, AutoNation's total franchise count will be 327 franchises, an increase of 34 franchises.
The company acknowledged the transactions are subject to customary terms and conditions, including manufacturer approval, and are expected to close later this year.
“We are pleased to have the opportunity to add 13 stores in Georgia, Alabama and Tennessee and three stores in the Baltimore, Md., / Washington, D.C. market and bring AutoNation's store count to 253 from coast to coast,” said AutoNation chairman, chief executive officer and president Mike Jackson.
“We continue to seek acquisitions to leverage our scale, expand the AutoNation brand and provide a peerless experience to more customers,” Jackson continued.
AutoNation didn’t mention any specifics about this development when the company hosted a conference call to share its second-quarter financial performance. However, investment analysts did ask company leadership if the entry of Warren Buffett and Berkshire Hathaway into the dealership world impede AutoNation from making any significant moves like this one.
The Wall Street observer inquired since Buffett’s investment outfit purchased the Van Tuyl Group a little more than a year ago to form Berkshire Hathaway Automotive.
AutoNation executive vice president Jonathan Ferrando indicated, according to the call transcript posted by SeekingAlpha.com, that they “haven't run into them on acquisitions, and we see very good pipeline with a lot of activity out there. If anything it may have increased sellers that are interested in exploring the marketplace.”
Jackson added that he and Buffett have met “a few times.”
Jackson went on to say, “I’ve talked to him about the car business a few times. I admire him as an investor. He is a value investor so he’s certainly a credible buyer in the marketplace, absolutely. But is he going to rush in and overpay for stuff? I don't think so, and we see no sign of that yet."