Group 1 Automotive Expands Atlanta Footprint with Hennessy Acquisition

The definitive agreement encompasses the dealership assets and real estate of Hennessy, which includes a portfolio of 10 dealerships representing prominent luxury and import brands such as Lexus, Jaguar/Land Rover, and Porsche. The facilities will also include 500 service bays staffed by approximately 280 technicians. The acquisition is projected to generate an impressive annualized revenue of approximately $1.7 billion and is expected to be immediately accretive to Group 1's earnings per share upon completion.

Daryl Kenningham, President and CEO of Group 1 Automotive, expressed enthusiasm about the acquisition: “Our cluster strategy has long focused on premium brands in attractive growth markets with high-revenue rooftops where we can leverage scale and expand margins. This acquisition significantly expands our presence in the growing Atlanta market and creates new opportunities to enhance operational efficiency and deliver attractive, long-term returns."

With this acquisition, alongside recent purchases of Stone Mountain Honda and Stone Mountain Toyota, Group 1 will expand its dealership presence in Atlanta from three to 15 locations. This growth positions Atlanta as Group 1's second-largest market by revenue, further solidifying its status as a key area for the company’s operations.

Atlanta is recognized as a robust automotive market due to its characteristics as the sixth largest metropolitan statistical area (MSA) and seventh largest designated market area (DMA) in the U.S. Notably, it is the fastest-growing MSA in the country and the largest market for luxury vehicles in the Southeast, boasting a remarkable 21% market share in that segment. The city's economic landscape is further strengthened by a real GDP growth rate that has outpaced the national average by over 50% between 2014 and 2023, with an approximate average household income of $150,000 within Hennessy’s market areas.

Peter Hennessy, representing the family business, highlighted the significance of the acquisition and the enduring legacy of their operations in Atlanta. "For 62 years, our family company has been a cornerstone of the Atlanta automotive community," Hennessy said. "Under Group 1's stewardship, I know this strong legacy and deep commitment to Atlanta will continue."

The acquisition is valued at around $1.3 billion, taking into account blue sky, real estate, and operating assets. Group 1 plans to finance this transaction through new debt, supported by a bridge commitment. The closing of the deal is anticipated by the end of 2026, pending regulatory approvals and other customary closing conditions.

The transaction involves multiple advisory teams, with J.P. Morgan Securities LLC acting as the exclusive financial advisor to Group 1. Legal support is provided by Hill Ward Henderson and Vinson & Elkins LLP. For Hennessy, Kerrigan Advisors is serving as the transaction advisor, with legal advice from Holland and Knight.

The acquisition of Hennessy Automobile Companies marks a pivotal moment for Group 1 Automotive as it continues to expand its footprint in key markets. By leveraging its cluster strategy in the vibrant Atlanta market, Group 1 aims to enhance operational efficiencies and deliver substantial long-term returns, reinforcing its position as a leader in the automotive retail sector.