February 10, 2015 – 1:12 pm ET
DETROIT — Penske Automotive Group Inc. is putting a courtesy and investment dollars deeper into a blurb automobile business.
The association announced today a U.S.-based commercial-vehicle dealership business will be called Penske Commercial Vehicles, U.S. It had been called ATC Holdco.
It also pronounced it has hired Richard Shearing, 40, as boss of Penske Commercial Vehicles, U.S. He will assistance grow Penske Automotive’s U.S. blurb lorry business, a association pronounced in a statement.
Penske Automotive has been investing hundreds of millions in a blurb automobile space recently. And while Penske Automotive will continue to buy and sell U.S. automobile dealerships this year, President Rob Kurnick told Automotive News, he pronounced that a heavy-duty blurb lorry shred is attractive. That’s since it provides clever enlargement opportunities since it is mostly unconsolidated.
It is also reduction dear to buy lorry dealerships than automobile dealerships since of really high valuations currently on many automobile dealerships, contend buy-sell experts.
Penske Automotive ranks No. 2 on a Automotive News list of a tip 125 dealership groups in a U.S., with sell sales of 199,795 new vehicles in 2013.
Expanding into trucks
Shearing started Feb. 1. He brings endless knowledge in Freightliner trucks, comment management, plan and building clever patron family from Daimler Trucks North America where he was clamp boss of inhabitant accounts. Before that, he was ubiquitous manager of member sales and executive of product strategy.
Penske Automotive’s enlargement into blurb trucks has been ongoing. Last week, it pronounced it finished a merger of dual medium- and heavy-duty blurb lorry dealerships handling in Chattanooga and Knoxville, Tenn. These dealerships paint a full line of Freightliner blurb lorry products underneath a code names Freightliner, Western Star, Sprinter and Freightliner Custom Chassis.
Penske Automotive estimates these dealerships will beget about $200 million in annualized revenue.
In Nov 2014, Penske Automotive bought a infancy interest in The Around a Clock Freightliner Group, a heavy- and medium-duty lorry dealership organisation located in Texas, Oklahoma and New Mexico. Penske Automotive Group now owns 91 percent of ATC. ATC operates fourteen locations, including 8 full-service dealerships charity Freightliner, Western Star, and Sprinter-branded trucks. ATC is projected to beget income of $600 million to $700 million a year.
At a time of a deal, Chairman Roger Penske pronounced in a media statement, “ATC represents a vital event for a company. Like a automotive sell dealership business, a heavy-duty lorry dealership attention is rarely fragmented and provides an glorious event for a association to build scale by serve consolidation.”
In 2013, Penske Automotive bought blurb automobile distributor Western Star Trucks Australia from Transpacific Industries Group. Western Star Trucks Australia distributes Western Star, Dennis Eagle and MAN medium- and heavy-duty trucks by some-more than 80 eccentric dealers in Australia, New Zealand, Indonesia, a Philippines and Papua New Guinea.
Alternate income generator
Penske pronounced in Aug he was looking during some-more acquisitions in Australia to enhance a company’s blurb automobile business there. The association reports a fourth-quarter and year-end gain on Wednesday.
The farrago of investment gives a association some coherence if a automobile sell marketplace takes a downturn, Kurnick said.
“If things get crazy here, we have a ability to change to opposite marketplaces where we already have businesses,” Kurnick said.
Truck dealerships are a good investment presently, pronounced Alan Haig, boss of Haig Partners, a dealership buy-sell advisory organisation in Fort Lauderdale, Fla.
“The multiples that people are profitable to acquire lorry dealerships are reduce than a multiples they are profitable to acquire automobile dealerships,” Haig said.
Haig pronounced there is still risk in a lorry zone since it is a rarely cyclical business.
“But this is a new investment plan for a Penske Automotive Group. They have motionless that investing in a lorry side is attractive,” Haig said. “There is usually one other large consolidator in a complicated lorry space.”
That consolidator, Haig said, is Rush Enterprises Inc.