Asbury Automotive: Acquisitions Resume With Boston's Herb Chambers Companies

Asbury Automotive Group announced Feb. 18 that it is acquiring privately owned auto dealer group The Herb Chambers Companies for $1.34 billion and intends to close the deal late in the second quarter using cash and credit lines. That price breaks down as $750 million for goodwill and $590 million for real estate. Additional consideration will be paid for Chambers’ vehicle and parts inventory. We are leaving our fair value estimate in place but will incorporate the deal when we roll our model for the 10-K. Our initial review of the deal suggests it is roughly fair value estimate neutral to slightly accretive. We expect the deal will close but if not, Chambers may have to pay Asbury a $100 million termination fee.