Penske Automotive, Mitsui up stake in Penske Truck Leasing

Lucas Deal

September 8, 2017

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Penske Automotive Group, Inc., and Mitsui & Co., Ltd., both acquired additional interest in Penske Truck Leasing, the company announced Friday.

Penske Automotive Group has acquired an additional 5.5 percent interest of the company from subsidiaries of GE Capital Global Holdings, LLC, for approximately $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 percent ownership interest in Penske Truck Leasing, Penske Automotive Group says it expects to realize earnings accretion, additional cash flow from cash tax savings and an increase in the annual cash distribution Penske Truck Leasing provides to its partners. The company says it estimates the earnings per share accretion from this transaction of $0.10 per share on an annualized basis.

Penske Automotive Group will continue to account for the ownership interest in Penske Truck Leasing using the equity method of accounting and will record its share of Penske Truck Leasing’s earnings under the caption “Equity in earnings of affiliates” in its statement of income.

Mitsui & Co., Ltd., Penske Truck Leasing’s second largest shareholder, also acquired an additional 10 percent ownership interest in Penske Truck Leasing at the same valuation. After completion of these transactions, Penske Truck Leasing is owned 41.1 percent by Penske Corporation, 28.9 percent by Penske Automotive Group, and 30 percent by Mitsui.

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