US multinational picks up distributor of Western Star, MAN and Dennis Eagle for $219 million
Huge US automotive concern Penske Group has bought Transpacific Industries-owned Commercial Vehicles Group (CVG), the importer and distributor of Western Star trucks, MAN trucks, MAN buses and Dennis Eagle trucks for Australia and New Zealand.
Penske parted with $219 million in a deal expected to be complete on September 30 when CVG will become part of its Penske Automotive Group arm.
For that, it says it expects to gain about US$420-460 million ($433-496 million) in annual revenue for US-listed Penske Automotive.
It will pick up a network of 65 dealers across Australia and 16 dealers across New Zealand, which provide full authorised parts, service and warranty functions for the three brands.
The Australian group also has dealer representation in Papua New Guinea, the Philippines and Indonesia.
This is Penske Automotive’s first foray into Australia but it is yet to say what its next steps will be.
“Our business success is driven by our core values – the importance of human capital, maintaining OEM relationships, our commitment to a premium brand mix, diversification, capital investment and fostering repeat and referral business through a commitment to customer satisfaction and exceeding expectations,” Penske Automotive Chairman Roger S. Penske states.
“The acquisition of the Commercial Vehicles Group of Transpacific fits with this model, and we are excited to enter the Australian market.”
The move is a strategic one aimed at bolstering its overseas business and diversifying its foreign income streams from the 36 percent of revenue that they occupy now.
“Western Star Trucks provides us with an attractive gateway to enhance our global business profile,” Roger Penske says.
“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.
“We believe that our existing relationships with heavy and medium-duty truck manufacturers and our experience in operating distribution and dealership-related businesses provide us with a unique opportunity to expand our business while potentially providing a steppingstone to Southeast Asian markets for other parts of our business.”
Penske Automotive, headquartered in Bloomfield Hills, Michigan, operates 332 retail automotive franchises, representing 39 different brands and 30 collision repair centers.
It owns Penske Truck Leasing, which operates and maintains more than 200,000 vehicles and services customers in North America, South America, Europe and Asia and describes it as one of the largest purchasers of commercial trucks in North America.
Services include full-service truck leasing, truck rental and contract maintenance, logistics services such as dedicated contract carriage, distribution center management, transportation management and lead logistics provision.
While Transpacific CEO Kevin Campbell sees the sale of “non-core” CVG as a lucrative part of a long-term rationalisation of his waste management firm, CVG Managing Director Paul Glavac counts it as an opportunity to cast wider issues aside.
“We are very eager to move forward as part of Penske Automotive Group – we now have a total company focus on commercial vehicles, and access to additional professional business practices and automotive experience which will provide for enhanced customer service and a broader platform for growth for us and our dealers,” Glavac states.
“We are excited about our prospects and look forward to continue to work with our existing dealers and customers.
“Our relationship with Transpacific will remain strong, and we will continue to provide quality products and customer service to this industry leading company.”