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ACQUISITIONS AND DIVESTITURES | 6 Months Ended
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Jun. 30, 2024
Discontinued Operations and Disposal Groups [Abstract] |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES Koons Acquisition On December 11, 2023, we completed the acquisition of the Jim Koons Dealerships ("Koons"). The results of the Jim Koons Dealerships have been included in our consolidated financial statements since that date. As a result of the Koons acquisition, we acquired 20 new vehicle dealerships, six collision centers and the real property related thereto, for a total purchase price of approximately $1.50 billion, which includes $256.1 million of new vehicle floor plan financing and $100.9 million of assets held for sale related to Koons Lexus of Wilmington. The preliminary purchase price was paid in cash. The sources of the preliminary purchase consideration are as follows:
| (In millions)
Cash | $ | 941.3 |
New vehicle floor plan facility | 256.1 |
Used vehicle floor plan facility | 307.1 |
Preliminary purchase price | $ | 1,504.5 |
Under the acquisition method of accounting, the tangible and intangible assets acquired and liabilities assumed are recorded at their estimated fair value based on information currently available. The following table summarizes the amounts recorded based on preliminary estimates of fair value:
Summary of Assets Acquired and Liabilities Assumed |
| (In millions)
Assets |
Inventories, net | $ | 310.6 |
Other current assets | 13.7 |
Assets held for sale | 100.9 |
Total current assets | 425.2 |
Property and equipment, net | 418.3 |
Goodwill | 238.9 |
Intangible franchise rights | 430.3 |
Operating lease right-of-use assets | 11.2 |
Total assets acquired | $ | 1,523.9 |
Liabilities |
Operating lease liabilities | $ | 11.2 |
Other liabilities | 8.2 |
Total liabilities assumed | 19.4 |
Net assets acquired | $ | 1,504.5 |
The preliminary acquisition accounting is based upon the Company’s estimates of fair value. The estimated fair values of the assets acquired and liabilities assumed and the related preliminary acquisition accounting are based on management’s estimates and assumptions, as well as other information compiled by management, including the books and records of Koons. Our estimates and assumptions are subject to change during the measurement period, not to exceed one year from the acquisition date. The areas of acquisition accounting that are not yet finalized primarily relate to the following significant items: (i) finalizing the review and valuation of inventory, land, land improvements, buildings and non-real property and equipment (including the models, key assumptions, estimates and inputs used) and assignment of remaining useful lives associated with the depreciable assets, and (ii) finalizing the review and valuation of manufacturer franchise rights (including key assumptions, inputs and estimates). As the initial acquisition accounting is based on our preliminary assessments, actual values may differ (possibly materially) when final information becomes available that differs from our current estimates. We believe that the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed. We will continue to evaluate these items until they are satisfactorily resolved and adjust our acquisition accounting accordingly, within the allowable measurement period. Measurement period adjustments recorded during the six months ended June 30, 2024 and their related effects on our consolidated statement of income were not material. On a preliminary basis, approximately $430.3 million of the purchase price was assigned to the indefinite lived franchise rights intangible assets related to the dealer agreements applicable to each new vehicle dealership. In addition, goodwill of $238.9 million was recognized and is primarily attributable to the anticipated synergies that Asbury expects to derive from the Koons acquisition as well as the acquired assembled workforce of the Koons dealerships. The Company's consolidated statement of income for the six months ended June 30, 2024 included revenue and net income attributable to the Jim Koons Dealerships of $1,406.7 million and $49.2 million, respectively.
Other Acquisitions and Divestitures There were no acquisitions during the six months ended June 30, 2024 and 2023. During the six months ended June 30, 2024, we sold one Lexus franchise (one dealership location) in Wilmington, Delaware due to OEM requirements in connection with the Koons acquisition, one Nissan franchise (one dealership location) in Denver, Colorado and one Nissan franchise (one dealership location) in Atlanta, Georgia. The Company recorded a pre-tax gain totaling $3.6 million, which is presented in our accompanying condensed consolidated statement of income as a gain on dealership divestitures. During the six months ended June 30, 2023, we sold one Acura franchise (one dealership location) in Austin, Texas. The Company recorded a pre-tax gain totaling $13.5 million, which is presented in our accompanying condensed consolidated statement of income as a gain on dealership divestitures.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent + Details
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