AutoNation Inc. plans to sell 17 collision centers — or about a quarter of its collision center rooftops — to Caliber Holdings in a transaction slated to close in the fourth quarter.
The auto retail giant, in a late Monday regulatory filing, said it inked the agreement with Caliber on Oct. 12. The deal includes a "long-term agreement" in which "certain AutoNation stores" would sell parts and refer business to the collision centers.
Financial terms were not disclosed.
Caliber, founded in 1997, has more than 1,400 locations. It has collision shops in 36 states, plus auto repair facilities in Texas and auto glass repair and replacement services, according to its website.
"AutoNation remains committed to its collision business and following the closing of the transaction will continue to own and operate the largest collision center footprint among its automotive retail peers with 55 collision centers located from coast-to-coast, including the collision center that the company recently acquired in Hilton Head, S.C.," AutoNation said in the filing.
AutoNation did not identify the collision centers it is selling in the filing and did not respond to requests for comment. Caliber also did not immediately comment.
AutoNation, the nation's largest new-vehicle retailer, said the 17 collision centers' gross profit represented less than 0.5 percent of its overall gross profit during the first six months of the year. AutoNation earned more than $2.3 billion in gross profits during that time.
Collision centers are part of AutoNation's brand extension strategy. In fall 2016, AutoNation, then with 70 collision centers, said it wanted to boost that count by at least 18 over two years.
Last year, AutoNation exited the aftermarket collision parts business — another piece of its brand extension strategy — as part of a cost-cutting and efficiency move.
In 2020, AutoNation sold two collision centers and through the first half of 2021 sold another two. It ended June with 72 collision centers.
AutoNation of Fort Lauderdale, Fla., ranks No. 1 on Automotive News' list of the top 150 dealership groups based in the U.S., retailing 249,654 new vehicles in 2020.