Penske Automotive To Buy Western Star Trucks Australia For About $200 Mln

(RTTNews) - Automotive retailer Penske Automotive Group Inc. (PAG) has agreed to buy Western Star Trucks Australia, a distributor of commercial vehicles, for about $200 million from Transpacific Industries Group Ltd.

Western Star Trucks Australia mainly distributes heavy and medium-duty trucks for Western Star, MAN and Dennis Eagle through a network of over 80 independent dealers.

Penske expects to fund the purchase price of about $200 million through available cash flow and credit facilities. The company expects to close the deal in the third quarter.

Commenting on the acquisition, Chairman Roger Penske said, "Western Star Trucks provides us with an attractive gateway to enhance our global business profile. Strong market dynamics, multiple growth options and one of the largest and well-established dealer networks in Australia and New Zealand enhance the business opportunity."

The acquisition is expected to generate about $420 million to $460 million in revenues and to be $0.10 to $0.14 accretive to adjusted earnings. Penske Automotive expects to incur around $0.02 per share in acquisition-related costs in its third-quarter results.