Asbury Automotive Group Expands Credit Facilities to Support Herb Chambers Acquisition

Asbury Automotive Group, Inc. (NYSE: ABG) has secured an amendment to its 2023 Senior Credit Facility to increase its financial flexibility in connection with its planned acquisition of the Herb Chambers automotive group.

Under the terms of the amendment to the Fourth Amended and Restated Credit Agreement, the following adjustments have been made:

The aggregate commitments under the revolving credit facility have increased from $500 million to $925 million.

The aggregate commitments under the new vehicle floor plan facility have increased from $1.925 billion to $2.25 billion.

These increases are contingent upon the successful completion of the Herb Chambers acquisition.

Bank of America, N.A. continues to serve as the administrative agent, revolving swing line lender, new and used vehicle floorplan swing line lender, and L/C issuer. Other lenders involved in the agreement maintain ongoing commercial, investment, and lending relationships with Asbury and may receive fees for their services.

Asbury Automotive Group, Inc. has announced its agreement to acquire The Herb Chambers Companies (HCC), one of the largest private auto dealership groups in the U.S., with 33 dealerships, 52 franchises, and three collision centers in Massachusetts and Rhode Island. The transaction, valued at $1.34 billion, marks one of the most significant acquisitions in U.S. auto retail history, as HCC generated $2.9 billion in revenue in 2024.

Asbury plans to finance the purchase through a combination of credit facility capacity, mortgage proceeds, and cash. Herb Chambers, the founder of HCC, will serve as a Special Advisor to Asbury and will retain ownership of Mercedes-Benz of Boston in Somerville, Massachusetts. The deal is subject to customary closing conditions and is expected to be finalized in the second quarter of 2025.

Asbury CEO David Hult emphasized that the acquisition aligns with the company’s strategy of providing a guest-centric automotive experience. Herb Chambers expressed confidence in Asbury’s ability to continue HCC’s legacy of customer service and community engagement.

Legal and financial advisors involved in the transaction include Jones Day, Hill Ward Henderson, Baker Tilly, BofA Securities, Stephens Inc., and WilmerHale.

Asbury Automotive Group, a Fortune 500 company, operates 152 new vehicle dealerships and 37 collision repair centers across the U.S. It has been recognized among America's Fastest Growing Companies by the Financial Times and as one of the World’s Most Trustworthy Companies by Newsweek.

Forward-looking statements in the announcement highlight potential risks, including regulatory approvals and integration challenges. However, Asbury remains optimistic about leveraging the acquisition to enhance its position in the automotive retail industry.

Asbury Automotive Group reported record fourth-quarter revenue of $4.5 billion, an 18% increase from the prior year. Gross profit rose 11% to $750 million, driven by a 19% growth in parts and service gross profit. However, new vehicle gross profit increased only 1%, and used vehicle retail gross profit declined by 2%. Adjusted EPS was $7.26, a slight 2% decline, while reported EPS increased significantly to $6.54 per diluted share, reflecting a 132% rise in net income.

For the full year 2024, total revenue reached a record $17.2 billion, a 16% increase. Adjusted net income was $545 million, a 16% decline, while reported net income fell 29% to $430 million. Adjusted EBITDA was $982 million, down 13% from the previous year. The company maintained strong liquidity at $828 million and a transaction-adjusted net leverage ratio of 2.85.

Asbury repurchased 830,000 shares for $183 million during the year and had $276 million remaining under its share repurchase authorization. The company continues to focus on operational efficiency, reducing SG&A expenses as a percentage of gross profit for the second consecutive quarter. Management remains confident in its long-term growth strategy, supported by investments in technology and expansion efforts.