Penske Automotive Group’s Q3 earnings results were mostly in line with auto retail industry trends, including higher overall revenue for its retail automotive segment and an increase in service and parts gross profit.
What’s different is that the Oct. 28 announcement was probably one of the chain’s last earnings reports as a publicly traded company.
That’s because parent company Penske Corp. and minority shareholder Mitsui & Co. Ltd. plan to buy the rest of Penske Automotive Group and take it private. That proposed transaction for $3.9 billion worth of stock is expected to close in the first quarter of 2027, pending shareholder and regulatory approval.
The buyers are already Penske Automotive Group’s biggest shareholders, by far. Before the transaction, Chairman Roger Penske, Penske Corp., and its Penske Automotive Holdings Corp., together owned about 52% of the dealership group, based in Bloomfield Hills, Michigan.
Tokyo-based Mitsui & Co. and its U.S. subsidiary, Mitsui & Co. (U.S.A.), between them owned another 20.3% of Penske Automotive Group before the deal, according to Mitsui’s announcement of the proposed transaction.
The proposed transaction is for the 27.8% of Penske Automotive Group the partners didn’t already own. After the transaction, Penske would own about 64%, and Mitsui 36%. The value of the buyout implies a $16.3 billion valuation for Penske Automotive Group as a whole.
The proposed deal to take the group private was first announced on July 22. A special committee of independent Penske Automotive Group board members later said it had endorsed the offer, in an announcement Oct. 15.
“If consummated, upon completion of the Proposed Transaction, the Company will become a privately held company,” Penske Automotive Group said in an Oct. 28 earnings release for the third quarter.
The group said in the release that because of the pending transaction, it would not hold a typical conference call to review results, which would normally be open to shareholders, analysts, and press. Nor would it hold the customary Q&A session with Wall Street analysts after the briefing, which would have been accessible to the same audience.
However, Penske Automotive Group did submit a third-quarter results press release and associated securities filings. The going-private transaction probably doesn't take place until the first quarter of 2027, and for Q3 at least, the group continued to report its results.
As of September 30, Penske Automotive Group operated 369 retail automotive franchised dealerships: 146 in the United States and 223 in other markets, principally the U.K., according to the group’s 10-Q report. The group is also owns used-only dealerships, and it is a major presence in commercial vehicle sales, leasing and service.
The group ended the quarter with $8.4 billion in revenue, a 5% increase compared to the same period last year. Retail automotive dealerships represented most of that revenue, which rose by $98 million YoY to reach $7 billion in the third quarter. Much of that revenue increase came from used vehicles, which rose $85 million YoY, with smaller increases for new vehicles and service and part sales.
From a profit standpoint, though, signals were more mixed. While automotive revenues generally rose, overall gross profits fell. In fact, in the retail automotive segment, gross profits fell for every segment category — including new vehicles, used vehicles, and finance and insurance — except service and part sales, which rose 3% YoY.
Penske’s retail segment ended the quarter with $1.1 billion in gross profits, down 1.3% YoY. The overall group ended with $1.3 billion in gross profits, up 1.8% YoY.
