Penske Automotive Increases Ownership Interest In Penske Truck Leasing

(RTTNews) - Penske Automotive Group Inc. (PAG) said that it has acquired an additional 5.5% interest in Penske Truck Leasing Co., L.P., a provider of transportation services and supply chain management, from subsidiaries of GE Capital Global Holdings, LLC, for about $239 million. The purchase price was funded using the existing liquidity on the company's U.S. credit agreement.

By acquiring the additional 5.5% ownership interest in PTL, the company expects to realize earnings accretion, additional cash flow from cash tax savings and an increase in the annual cash distribution PTL provides to its partners. The company estimates the earnings per share accretion from this transaction of $0.10 per share on an annualized basis.

PAG said it will continue to account for the ownership interest in PTL using the equity method of accounting and will record its share of PTL's earnings under the caption "Equity in earnings of affiliates" in its statement of income.

At the same time, Mitsui & Co., Ltd., second largest shareholder, acquired an additional 10% ownership interest in PTL at the same valuation. After completion of these transactions, PTL is owned 41.1% by Penske Corporation, 28.9% by Penske Automotive Group, and 30% by Mitsui.