On Friday, used-and-new car dealer Group 1 Automotive announced that it has entered into a definitive agreement to purchase all outstanding shares of Brazil's UAB Motors Paricipacoes in a stock-and-cash transaction worth approximately $145 million, or a bit over $200 million inclusive of UAB's $62 million in net non-floorplan debt.

Specifically, Group 1 will exchange 1.45 million of its own shares, plus $47.4 million in cash, for the target's shares.

Buying UAB, Group 1 will acquire two Toyota, four Nissan, two BMW, two BMW/Mini, three Renault, three Peugot, one Land Rover, and one Land Rover/Jaguar dealership -- 18 shops in all -- distributed among the Sao Paulo market and several other "key metropolitan markets" in the neighboring state of Parana. Group 1 estimates that the annual revenues generated by these businesses will be $650 million.


This results in a price-to-sales ratio of about 0.22 on the purchase, roughly equivalent to Group 1's own 0.2 P/S ratio. Group 1 additionally notes that the acquisition will be "modestly accretive" to earnings in 2013, adding anywhere from $0.03 to $0.05 per share, pro forma. The transaction is expected to close on or about Feb. 28.

Group 1 shares are down 0.7% on the news, at $67.24.

The article Group 1 Automotive to Buy Brazilian Car Dealer originally appeared on Fool.com.

Fool contributor Rich Smith and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


Increase your money and finance knowledge from home

Investing Like Warren Buffett

Learn from one of the world's best investors.

View Course »

Reading a Stock Quote

Learn to read the ingredients of a stock.

View Course »

Add a Comment

*0 / 3000 Character Maximum