BLOOMFIELD HILLS, MI - Premier Truck Group, a subsidiary of Penske Automotive Group, Inc. (NYSE:PAG), has expanded its operations with the acquisition of River States Truck and Trailer, Inc. (RSTT), a move anticipated to contribute an additional $200 million in estimated annualized revenue. The announcement was made today, signaling a significant growth in Premier Truck Group's North American presence.
The acquisition integrates RSTT's five facilities located in western Wisconsin and eastern Minnesota into Premier Truck Group's network, which now totals 48 locations. These facilities are strategically placed along major trucking corridors between Chicago and Minneapolis, enhancing service accessibility for customers in these areas.
Included in the acquisition are three full-service dealerships offering Freightliner and Western Star brands in Eau Claire, La Crosse, and Roberts, which will be rebranded under the Premier Truck Group name. Additionally, two independent repair facilities, JL Truck and Trailer in Osseo, WI, and Minnesota Truck and Trailer in Eagan, MN, will join the Premier Truck Group portfolio.
The expansion adds 161,000 sq. ft. of facilities, 96 service bays, and 63 technicians to Premier Truck Group's operational capabilities. Ron Long, President and CEO of Premier Truck Group, emphasized the company's commitment to delivering the best customer experience in North America and achieving operational excellence.
Premier Truck Group's growth strategy also includes expanding its heavy truck collision network, with the Eagan and La Crosse locations becoming the newest additions. With these, the network will encompass 12 collision centers across the country.
Penske Automotive Group, headquartered in Bloomfield Hills, Michigan, operates as a diversified international transportation services company and is recognized as a leading automotive and commercial truck retailer. The group employs over 28,500 people worldwide and has a significant stake in Penske Transportation Solutions, which manages an extensive trucking fleet in North America.
The acquisition is part of a broader strategy by Penske Automotive Group to enhance its market presence and service offerings in the commercial trucking industry. This expansion is expected to bring operational efficiencies and synergies to the company's already robust network.
This news is based on a press release statement from Penske Automotive Group, Inc. The forward-looking statements in the press release are subject to various risks and uncertainties that could cause actual results to differ materially from those projected.
InvestingPro Insights
As Penske Automotive Group, Inc. (NYSE:PAG) broadens its reach with the strategic acquisition of River States Truck and Trailer, Inc., the company's financial health and market performance remain a key focus for investors. With a market capitalization of approximately $9.92 billion and a P/E ratio that stands at a competitive 9.92, PAG shows a strong footing in the Specialty Retail industry.
InvestingPro Tips highlight the company's commitment to shareholder returns, having raised its dividends for 3 consecutive years and maintained dividend payments for 14 consecutive years. The dividend yield currently stands at a healthy 2.58%, and the company has experienced a notable dividend growth of 57.38% over the last twelve months as of Q1 2024. These figures underscore PAG's dedication to providing consistent value to its investors.
The company's solid performance is also reflected in its gross profit margin of 16.62% and an operating income margin of 4.54%, despite concerns over weak gross profit margins. Analysts have taken a cautious stance with five of them revising earnings estimates downwards for the upcoming period, suggesting that potential investors should keep a close eye on the company's future earnings reports.
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