Group 1 Automotive Inc. plans to acquire one of Brazil's largest dealership groups.
In a single move, the Houston company will add almost as much in annual revenues as it did with all of its 2012 acquisitions and will establish a retail foothold in the world's fourth-largest new-vehicle market.
Under the deal, Group 1 will buy UAB Motors Participacoes and its 18 dealerships: two Toyota, four Nissan, two BMW, two BMW-Mini, three Renault, three Peugeot, one Land Rover and one Land Rover-Jaguar.
The dealerships -- with 21 franchises representing eight brands in Sao Paulo and markets in the neighboring state of Parana -- are expected to generate approximately $650 million in estimated annual revenues, Group 1 said.
The purchase continues the company's expansion drive, particularly overseas, as it positions itself to take advantage of the rebound in new-vehicle sales.
In 2012, the company added 16 franchises and disposed of six franchises.
Group 1, the fourth-largest dealership group in the United States, currently owns 121 auto dealerships and 31 collision centers in the United States and the United Kingdom. Collectively, the stores sell 31 brands, including Toyota, Nissan, BMW, Mini and Audi.
The UAB purchase will add four new brands to Group 1's portfolio: Renault, Peugeot, Land Rover and Jaguar.
"Group 1 is delighted by the opportunity of expanding into Brazil, a fast-growing automotive market, by adding these great brands and the successful UAB operating team to our company," CEO Earl Hesterberg said in a statement.
"To enter one of the largest auto markets in the world with a well-established retail infrastructure and management team provides Group 1 and our shareholders with an incredible growth opportunity. We are also excited to further expand our relationships with some of our key manufacturer partners to the Brazilian market."
Group 1 said UAB is one of the largest sellers of Nissan and Peugeot vehicles and is a top-five retailer of BMW, Mini and Land Rover vehicles in Brazil.
The business will continue to be operated by the current management team. UAB Chairman Lincoln da Cunha Pereira Filho will report to Hesterberg and will join Group 1's board of directors.
Group 1 said the purchase price includes approximately $47.4 million in cash, 1.45 million shares of Group 1 common stock priced at $60.77 a share, and the assumption of approximately $62 million of debt.
A total of 3.8 million new vehicles were sold in Brazil last year.