Editor's note: This article has been updated to clarify details about the acquisition of Larry H. Miller Dealerships and LHM's Total Care Auto finance and insurance products provider.
Asbury Automotive Group Inc. executives say the retailer has cut enough debt from its books to resume buying dealerships.
Asbury CFO Michael Welch told analysts last week that the retailer didn't plan to seek new acquisitions until it had cut its leverage to 2 times earnings. CEO David Hult told Automotive News on Monday that Asbury's debt ratio is close enough to that point for the dealership group to re-enter the buy-sell market.
That ratio had been 2.7 in December 2021, the month Asbury closed on its $3.2 billion acquisition of Larry H. Miller Dealerships and LHM's Total Care Auto finance and insurance products provider. At the end of June, Asbury carried debt of 2.1 times what it earned before interest, taxes, depreciation and amortization, once adjusted for the impact of acquisitions and divestitures.