Asbury Automotive Group Inc. on Friday said it has agreed to spend $1.2 billion to purchase Jim Koons Automotive Cos. in a deal that would be one of the largest in auto retail history.
The transaction agreement announcement, which will consolidate a top 25 dealership group into the publicly traded Asbury, comes just three days after Asbury said it was in talks to buy the group.
It also comes two years after a boom of megadeals in the auto retail space, including Asbury’s acquisition of the Larry H. Miller Dealerships.
“This acquisition is transformative for our company, enabling Asbury to further expand into one of the country’s top economies in one of its fastest growing regions, with some of the U.S.’ best performing dealerships,” Asbury CEO David Hult said in a statement.
Acquiring Koons would add 20 franchised dealerships, six collision centers and one used-car store to Asbury’s portfolio. The Koons group reported $3.2 billion in revenue in 2022.
Asbury will fund the purchase, expected to close in the fourth quarter or early in the first quarter, using cash, credit and existing liquidity, according to the statement.
The approximate $1.2 billion price tag includes $740 million for the dealerships’ blue sky and about $417 million for the real estate and leasehold improvements. Blue sky is the intangible value of a dealership, including goodwill.
Asbury also will acquire new vehicles, used vehicles, service loaner vehicles, fixed assets, parts and supplies for a purchase price to be determined at closing.
“This milestone transaction, the largest since 2021, reflects the strength of the U.S. auto retail market in 2023, as well as the importance of family legacy and reputation to acquiring groups,” Erin Kerrigan, managing director of Kerrigan Advisors, said in a statement. “In Koons, Asbury is adding a 59-year-old business and the top auto retail brand in the Washington-Baltimore market — one of the most economically vibrant regions in our country.”
Kerrigan Advisors, a sell-side firm based in Incline Village, Nev., is representing Koons in the sale.
Jim Koons, chairman of Jim Koons Automotive, said in a statement that Asbury is committed to its employees.
“Our work with David Hult, and the Asbury team, gives us confidence that not only are our customers in excellent hands, but so are our employees, with opportunities for future growth being a part of Asbury,” he said.
The purchase would be Asbury’s first since the company announced in April 2022 that it was increasing its annual revenue goal to $32 billion by 2025, including adding adding $6.2 billion in revenue through acquisitions by 2025.
Jim Koons Automotive, of Vienna, Va., ranks No. 23 on Automotive News’ list of the top 150 dealership groups based in the U.S., retailing 26,188 new vehicles in 2022. Asbury, of Duluth, Ga., ranks No. 5 on that same list, retailing 151,179 new vehicles last year.
