Asbury Automotive Group completes acquisition of Herb Chambers Companies

DULUTH, Ga. - Asbury Automotive Group, Inc. (NYSE:ABG), currently trading at $231.77 and showing strong financial health according to InvestingPro metrics, has completed the acquisition of The Herb Chambers Companies (HCC), a major dealership group in the Northeastern United States, for $1.45 billion.

The transaction brings 33 dealerships representing 52 franchises and three collision centers to Asbury’s portfolio, marking the company’s entry into the Northeast market. HCC, which generated $3.2 billion in revenue in 2024 and sold approximately 50,000 vehicles, holds a leading market share in Massachusetts. This acquisition adds to Asbury’s impressive $17.1 billion in revenue over the last twelve months, with the company maintaining a healthy 17.06% gross profit margin.

"Herb redefined the car-buying experience in New England, making ’Herb Chambers’ a household name," said David Hult, Asbury’s President and CEO, in a press release statement.

The $1.45 billion purchase price includes $750 million for goodwill, approximately $610 million for real estate and leasehold improvements, and about $85 million for vehicles, fixed assets, parts and supplies, net of $375 million in non-manufacturer floorplan.

Asbury funded the acquisition primarily through credit facility capacity, mortgage proceeds, and cash. The company expects the purchase to diversify its geographic footprint and create value for shareholders. With a P/E ratio of 11.01 and strong financial metrics, InvestingPro analysis reveals additional insights about Asbury’s value creation potential, available in the comprehensive Pro Research Report.

Founded in 1985, HCC employs more than 2,200 people across Massachusetts and Rhode Island, with most locations concentrated around Boston.

Asbury Automotive Group, a Fortune 500 company headquartered in Duluth, Georgia, operated 145 new vehicle dealerships with 189 franchises representing 31 brands as of June 30, 2025, prior to this acquisition. Despite recent market volatility causing a 12.67% decline in stock price over the past week, the company maintains strong fundamentals with an EV/EBITDA ratio of 8.32 and robust cash flow generation.

BofA Securities served as financial advisor to Asbury, while Stephens Inc. advised HCC on the transaction.

In other recent news, Asbury Automotive Group reported its first-quarter 2025 earnings, revealing an adjusted earnings per share (EPS) of $6.82, which exceeded analyst expectations of $6.66. However, the company’s revenue for the quarter was $4.1 billion, falling short of the anticipated $4.35 billion. The firm is engaged in an expansion strategy, including the pending acquisition of Herb Chambers Automotive Group, valued at $1.34 billion. Meanwhile, JPMorgan downgraded Asbury Automotive from Neutral to Underweight due to concerns about the increased leverage from recent mergers and acquisition activities, including the Herb Chambers deal.

JPMorgan also highlighted potential execution risks with Asbury’s operational initiatives, such as the rollout of new dealer management system software and the expansion of its captive warranty business. Despite these concerns, Asbury Automotive continues to focus on innovation, notably through the expansion of its Techeon software. The company is also planning significant capital expenditures of $250 million for 2025-2026 and aims to reduce leverage over the next 18-24 months. Asbury’s parts and service segment showed resilience with a 5% increase in gross profit, despite a decline in used vehicle units. These developments reflect Asbury’s ongoing strategic initiatives and the challenges it faces in the current market environment.

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