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ACQUISITIONS AND DISPOSITIONS
9 Months Ended
Sep. 30, 2021
Business Combination and Asset Acquisition [Abstract]  
ACQUISITIONS AND DISPOSITIONS ACQUISITIONS AND DISPOSITIONS
Acquisitions
The Company accounts for business combinations under the acquisition method of accounting, under which the Company allocates the purchase price to the assets and liabilities assumed based on an estimate of fair value.
During the nine months ended September 30, 2021, the Company acquired two dealerships, representing two franchises, in the U.S. and seven dealerships, representing nine franchises, in the U.K. Aggregate consideration paid for these dealerships, which were accounted for as business combinations, totaled $74.6 million, net of cash acquired. Goodwill associated with these acquisitions totaled $41.4 million.
During the nine months ended September 30, 2020, the Company acquired a collision center in the U.S., which was integrated into an existing dealership. Aggregate consideration paid was $1.3 million. Goodwill associated with this acquisition was not material.
On September 13, 2021, the Company entered into a Purchase Agreement (the “Purchase Agreement”) to purchase substantially all the assets, including real estate, of Prime Automotive Group (the “Seller”), headquartered in Westwood, Massachusetts (the “Prime Acquisition”). The Company expects to pay a purchase price of approximately $880 million, excluding repayment of sellers’ floorplan notes payable, subject to customary adjustments described in the Purchase Agreement (the “Purchase Price”) and appropriate reductions for any exercise of customary manufacturer rights of first refusal. The Purchase Price is expected to be financed through a combination of cash, available lines of credit and debt financing. The operating assets expected to be acquired include 30 dealerships, representing 43 franchises, and three collision centers in the Northeastern U.S. In connection with the execution of the Purchase Agreement, the Company made a deposit of $20.0 million into an escrow account. The deposit is recorded in Other Current Assets on the Condensed Consolidated Balance Sheets and reflected in Other within Cash Flows from Investing Activities on the Condensed Consolidated Statements of Cash Flows. The Prime Acquisition is expected to close in November 2021.
In October 2021, the Company acquired three dealerships representing six franchises in the U.S. for approximately $66.8 million, excluding repayment of sellers’ floorplan notes payable.
Dispositions
The Company’s dispositions generally consist of dealership assets and related real estate. Gains and losses on dispositions are recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.
During the nine months ended September 30, 2021, the Company recorded a net pre-tax gain totaling $1.8 million related to the disposition of two dealerships representing two franchises and one franchise within an existing dealership in the U.S. The dispositions reduced goodwill by $2.2 million. The Company also terminated one franchise representing one dealership in the U.K.
During the nine months ended September 30, 2020, the Company had no activity related to dispositions.