Penske Automotive Group Inc.
), on August 28, reported the completion of the previously
announced offering of $550 million of 5.75% senior subordinated
notes due 2022. The offering was made to qualified institutional
buyers in the U.S. with respect to Rule 144A. Outside U.S., the
offerings were made in accordance with Regulation S of the
Securities Act of 1933.
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The company will utilize the proceeds of the offering for the
purchase of all the $375 million of 7.75% senior subordinated notes
due 2016 and for the payment of fees and expenses related to the
offering. The remaining amount will be utilized in the repayments
of the company's current dues under the U.S. credit agreement and
settlement of its U.S. floor plan borrowings.
Penske, in the second quarter of 2012, witnessed a 31% rise in
adjusted earnings per share to 55 cents from 42 cents per share in
the corresponding quarter last year. The results surpassed the
Zacks Consensus Estimate by a penny. Profit escalated 26.4% to
$49.5 million from $39.2 million in the year-ago quarter.
Revenues increased 19.2% to $3.4 billion, surpassing the Zacks
Consensus Estimate of 3.3 billion. The growth was attributable to a
20.9% increase in retail sales volume, a 24.8% surge in new vehicle
and a 16.4% hike in used vehicle unit sales.
Penske Automotive Group sells new and previously owned vehicles
along with finance and insurance products. It operates 340 retail
automotive franchises, providing 41 different brands and 30
collision repair centers. Apart from its franchises in U.S. and
Europe, the company offers repair and maintenance services to the
brands it sells.
The company's product mix, including a wide range of imported and
luxury brands, helps it maintain a strong foothold in both the U.S.
and international markets. It competes with
). Currently, Penske has a Zacks #3 Rank, which translates into a
short term (1 to 3 months) Hold rating.