The deal, described by one buy-sell expert as "giant," is expected to close by the end of March, pending approval by manufacturers and regulators. Asbury will acquire three Mercedes-Benz dealerships (one including a Sprinter franchise), two Jaguar-Land Rover and two Lexus stores, one Porsche and one Volvo store as well as Park Place Premier Collection, which sells Bentley, Rolls-Royce, McLaren, Maserati and Karma.
Ken Schnitzer started Park Place in 1987 with one Mercedes-Benz store.
Schnitzer, chairman of Park Place, said the decision to sell most of his portfolio wasn't easy.
"I am extremely proud of what we have accomplished and the culture we have built," Schnitzer, 66, said in a statement. "I will keep my hand in the automotive industry by retaining two dealerships and a body shop in Grapevine."
Brodie Cobb, CEO of Presidio Group in San Francisco, an investment banking adviser representing Park Place, said the dealerships were marketed for sale this fall. Discussions with Asbury were serious for about three months, he said.
"There were several other interested potential buyers, all of whom were qualified to both purchase it and integrate it and operate it," Cobb said. He could not identify other suitors because of nondisclosure agreements.
Cobb said Schnitzer and his brother, Doug Schnitzer, CEO of real estate holding company Senterra, are business partners in auto retail and other endeavors. Cobb said the two thought it was the right time to sell most of the dealerships.
Ken Schnitzer connected with Asbury management through discussions that covered the culture at Asbury today and into the future, Cobb said. Hult told analysts he expects to learn from Park Place and that best practices could be deployed across the Asbury platform.
"It seemed like a very good fit for where Park Place has been and is today," Cobb told Automotive News. "And they seem like excellent stewards of the Park Place brand, its stores, its employees and, ultimately, its customers."
The deal is one of the largest buy-sell dealership transactions of the past decade, according to reports and buy-sell experts. It is smaller than Berkshire Hathaway's 2015 mega acquisition of 81 stores from Van Tuyl Group but larger than other deals, such as Lithia Motors Inc.'s 2014 purchase of 27 DCH Auto Group dealerships.
Asbury has been growing its store portfolio. Already this year, Asbury bought the four-store Bill Estes Automotive, a Toyota store and collision center, all in the Indianapolis market, and entered Colorado with its first Subaru store, in Thornton. The six stores and collision shop, slated to add $425 million in annualized revenue, cost the company $210 million, according to a regulatory filing. Asbury also sold one dealership and a collision center in the Houston market this year for $39.1 million.
Hult told analysts last week that Asbury may look for additional stores for the Denver market but largely would be focused on paying down debt over the next two years.
Asbury said the Park Place purchase includes $785 million of goodwill, about $215 million in real estate and leasehold improvements and about $30 million in parts and other fixed assets. The company said it would pay for the acquisition through existing credit, operational cash flow and committed financing.
Asbury, of Duluth, Ga., ranks No. 7 on Automotive News' list of the top 150 dealership groups based in the U.S., retailing 105,275 new vehicles in 2018.