Houston Corporation Buys Out Miller Auto Business in L.A. Area
By SHELLY GARCIA
San Fernando Valley Business Journal
Miller Automotive Group, with six Los Angeles locations, has been sold to Group 1 Automotive Inc., a Fortune 500 car retailer based in Houston.
The acquisition marks Group 1's entry to the Southern California marketplace.
Miller operates Honda, Nissan, Infiniti and Mitsubishi dealerships in Van Nuys and Toyota and Honda dealerships in Culver City.
"We have wanted to be in California since we went public" in 1997, said Ben Hollingsworth, chairman, president and chief executive of Group 1. "And we've known the Millers for some time and have never been able to put it together. We were just patient."
The value of the deal was not disclosed. However, in announcing the acquisition, Group 1 said it paid $85 million for five dealerships Miller among them in Los Angeles, Tulsa and Houston. The five dealerships have a total of $530 million in annual revenues and, because Miller accounted for about $400 million of that total, it is presumed to have comprised the bulk of the purchase price.
Fred Miller, the company's chief executive, and Mike Miller, its president, will remain under three-year contracts. The company had been owned by the Miller family for 60 years and was the 64th largest dealership in the United States, according to Ward's "MegaDealer 100" list of top dealerships.
Fred Miller declined to comment on details of the sale, referring calls to Group 1. Hollingsworth said the family's decision to sell was part of an exit strategy.
"Their business has been in the family for almost 60 years," said Hollingsworth. "They reached the decision they needed to get their estate in liquid order and prepare for eventual retirement. This provided them an outlet."
Dave Hutton, Miller Group's chief operating officer, was named platform president of the dealerships, which Hollingsworth said would continue to operate under the Miller name and management. A platform is the core set of dealerships in a market.
"We like to establish a platform and build with tuck-in (single franchise) acquisitions," said Hollingsworth. "We do it for brand augmentation and because it's more revenue to cover our operating budget."
Group 1 had second-quarter net income of $19.1 million, compared with $14 million for the like period a year ago. Revenues were $1.03 billion vs. $1 billion the year earlier. The company owns 72 dealerships in Texas, Oklahoma, Florida, Georgia, New Mexico, Colorado, Louisiana and Massachusetts.
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