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Penske Automotive Closes Harper Truck Centres Buyout

Penske Automotive Group, Inc.’s PAG subsidiary, Premier Truck Group has acquired Harper Truck Centres, a Freightliner, Western Star, Thomas Built Bus and Fuso commercial truck dealership. This group operates in Ontario, Canada.

The Harper Truck Centres group operates through five dealerships in the greater Toronto market area and services Highway 401. This serves as a major access route for trucks between Buffalo, NY, and Detroit, MI. Penske Automotive expects that this acquisition will add annual revenues of $130 million.

Additionally, the company thinks that the buyout complements its partnership with Freightliner and Western Star brands, which are the division and subsidiary of Daimler AG’s DDAIF subsidiary, Daimler Trucks North America. Daimler Trucks North America has a strong market share in Canada. Thus, this acquisition will provide huge market potential to Penske Automotive and lead to business opportunities in the future.

Penske Automotive aims to boost earnings by expanding its dealership network. In Jan 2016, the company announced that it has acquired a 49% equity ownership interest in Nicole Group, a luxury dealership group that operates in Kanagawa and Tokyo, Japan. With this stake buy, Penske Automotive entered the Japanese market with a strong and established local partner. The company expects to benefit from the strength of the luxury dealership group’s existing business in addition to expanding further through growth and acquisitions.

Zacks Rank & Key Picks

Penske Automotive currently carries a Zacks Rank #4 (Sell).

Some better-ranked automobile stocks include Cooper Tire & Rubber Co. CTB and Superior Industries International, Inc. SUP. Both the stocks sport a Zacks Rank #1 (Strong Buy).

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PENSKE AUTO GRP (PAG): Free Stock Analysis Report
 
DAIMLER AG (DDAIF): Free Stock Analysis Report
 
SUPERIOR INDS (SUP): Free Stock Analysis Report
 
COOPER TIRE (CTB): Free Stock Analysis Report
 
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