Fort Lauderdale-based AutoNation, the country’s largest retailer of cars and light trucks, on Tuesday said it has agreed to acquire six large auto retail stores in Texas with annual revenues of about $575 million.
Mike Jackson, AutoNation’s chairman and CEO, said in a television interview that the deal “is probably the largest in over a decade” in the auto retailing business.
AutoNation has seen its unit sales increase steadily during the country’s slow economic recovery, and the new acquisitions are a sign that the giant auto retailer expects continued growth. “You want to know what I’m thinking, look at what I do,” Jackson said on CNBC’s Squawk Box program.
He also announced that his company’s November new unit sales totaled 22,571 units, up 21 percent over the same month last year.
The sale price of the acquisitions was not announced. An AutoNation spokesperson said that the sellers did not want to reveal this information. In the past, the sales price of dealerships has been around three to five times annual revenues, according to industry estimates.
The acquisitions, which are expected to sell around 14,000 new and used vehicles in 2012, will add about 700 employees to AutoNation’s payroll, which stood at 19,400 at the end of 2011.
AutoNation is buying five stores from Boardwalk Auto Group in the Dallas area with annual sales of about $375 million. The five are three Volkswagen stores and one each for Audi and Porsche. Boardwalk Porsche ranked among the top ten in new vehicle sales for the brand thus far this year. Boardwalk, founded by Scott K. Ginsburg, the main shareholder, will continue to own and operate several other luxury car dealerships.
In Houston, AutoNation is acquiring Spring Chrysler Jeep Dodge Ram from the current owners, Alfred Flores and Bruce Glascock. Spring is the highest volume Chrysler Jeep Dodge Ram dealer in the Texas market and the fourth largest in the United States.
The deals are expected to close by the end of the year.
The purchase of these new stores will give AutoNation a total of 227 stores. Upon completion of the deals, the company will own and operate 50 new car franchises in Texas.
AutoNation’s most recent acquisition was in early 2011, when it bought a Toyota dealership in Fort Myers with annual sales of $135 million. It largest recent purchase prior to Tuesday was a Mercedes-Benz store in Pompano Beach, which had annual revenues of $230 million.