At signing, the Purchase and Sale Agreement (filed as Exhibit 2.1 to Asbury's Q1 2025 Form 10-Q) set an aggregate purchase price of approximately $1.34 billion, consisting of $750 million allocated to goodwill ("blue sky") and a real estate purchase price of $528,350,000 plus reimbursable, verifiable construction costs capped at an additional $185.9 million (together described in the 8-K as approximately $590 million for real estate and improvements), with the price for inventory, fixed assets, parts and supplies to be determined at closing. HCC generated $2.9 billion of revenue in 2024 per the announcement press release; the closing press release separately cited $3.2 billion of 2024 revenue and approximately 50,000 new and used vehicles sold, with more than 2,200 employees. At closing on July 21, 2025, Asbury reported an aggregate net purchase price of approximately $1.45 billion: $750 million for goodwill, approximately $610 million for real estate and leasehold improvements, and approximately $85 million for new vehicles, used vehicles, service loaner vehicles, fixed assets, parts and supplies, net of $375 million of non-manufacturer floorplan debt assumed. In the preliminary purchase price allocation disclosed in the Form 8-K/A pro forma financial statements, the $750 million was split between $286.8 million of goodwill and $463.2 million of indefinite-lived franchise rights intangible assets. No EV/EBITDA, P/E or per-share multiple was disclosed for the transaction, consistent with it being an asset purchase from a private company rather than a public-company merger.
The transaction was funded through a combination of Asbury's senior credit facility, new mortgage/real estate financing, and cash on hand, with no financing condition under the agreement. In connection with closing, Asbury's subsidiaries borrowed $546,528,750 under a new ten-year Real Estate Credit Agreement with Wells Fargo Bank, N.A. as administrative agent, bearing interest at SOFR plus 2% or, at Asbury's option, a Base Rate plus 1%, repayable in 118 monthly principal payments of $2,277,203 beginning September 1, 2025 with a balloon payment at maturity. Concurrently, Asbury expanded its existing senior credit facility (administered by Bank of America, N.A.) by $750 million under a First Amendment to its Fourth Amended and Restated Credit Agreement dated April 9, 2025. Per the pro forma balance sheet adjustments, financing included $650 million under the revolving credit facility, $546.5 million under the real estate term loan, $598.4 million of incremental new and used vehicle floor plan liabilities, and $46.3 million of cash on hand. As part of its pro forma financial statements, Asbury disclosed estimated "management's adjustments" cost savings consisting of reduced executive compensation (based on historical HCC compensation levels) of $12.0 million for the three months ended March 31, 2025 and $65.6 million for the year ended December 31, 2024, plus one-time transaction costs of $4.7 million in the Q1 2025 period. On a pro forma basis including these adjustments, combined net income was $141.7 million for Q1 2025 and $467.1 million for full-year 2024, with diluted pro forma EPS (after cost savings) of $7.19 for Q1 2025; pro forma combined revenue was $4,830.1 million for Q1 2025 and $19,865.3 million for full-year 2024. The pro forma information also reflects the divestiture of four dealerships (two Lexus and two General Motors stores) required by manufacturers as a condition of the acquisition closing.
On the acquirer side, Jones Day and Hill Ward Henderson served as legal counsel to Asbury, Baker Tilly served as transaction advisory firm, and BofA Securities served as financial advisor. For HCC, Stephens Inc. served as financial advisor and WilmerHale served as legal counsel. The Purchase and Sale Agreement required approval of the transaction by certain automotive manufacturers, expiration or termination of the Hart-Scott-Rodino antitrust waiting period, continued accuracy of representations and warranties, assignment of certain leases and key contracts, and absence of a material adverse effect; it was not subject to a financing condition. Asbury deposited $10 million of earnest money into escrow at signing, with an indemnity escrow of $75 million and an adjustment escrow of $2.5 million also established under the agreement. On Asbury's earnings call, Hult confirmed "the asset purchase agreement we have doesn't have a breakup fee for us. It does for the seller," and the original Form 8-K disclosed that in certain circumstances of termination, HCC could be required to pay Asbury a termination fee of $100 million, while in other circumstances Asbury would forfeit its earnest money to HCC. The agreement also specified that closing could not occur before June 16, 2025.
The transaction closed on July 21, 2025, completing the acquisition as a business combination under ASC Topic 805. Status is updated from pending regulatory approval to closed based on Asbury's Form 8-K filed July 21, 2025 (Items 1.01, 2.01, 2.03, 7.01) reporting completion of the acquisition, corroborated by the Form 8-K/A filed July 29, 2025 containing HCC's audited financial statements and pro forma combined financial information, and by Asbury's Form 10-Q for the quarter ended June 30, 2025, which states "On July 21, 2025, we completed the acquisition of The Herb Chambers Companies." The company noted the purchase price allocation remained preliminary as of the Q2 2025 10-Q and would be updated in the Form 10-Q for the quarter ending September 30, 2025.