Group 1 Automotive announced it plans to offer $1.25 billion in senior unsecured notes, split into two equal tranches of $625 million each—one maturing in 2032 and the other in 2035. The offering, announced from Houston, is subject to market conditions.
Net proceeds, together with existing cash, will fund the company's previously announced acquisition of dealership assets and related real estate from Hennessy Automobile Companies and certain affiliates. Group 1 expects the note offering to close before the completion of what it calls the Hennessy Acquisition. Pending that closing, the company plans to use the proceeds temporarily to repay outstanding borrowings under the acquisition line of its revolving credit facility, which it then intends to reborrow to finance part of the purchase price.
The deal includes a redemption contingency tied to the acquisition timeline. If the Hennessy Acquisition does not close by January 6, 2027, or if a later extended date, or if the purchase agreement is terminated before then, Group 1 must redeem all of the 2032 notes at 100% of their initial issue price plus accrued and unpaid interest. Any remaining proceeds not required for redemption would be applied to repay revolving credit facility borrowings and for general corporate purposes.
The notes will be offered to qualified institutional buyers pursuant to Rule 144A and to non-U.S. persons outside the United States under Regulation S. They have not been registered under the Securities Act of 1933.
Group 1 Automotive (NYSE: GPI) operates 249 dealerships across the United States and the United Kingdom, running 310 franchises and 32 collision centers across a network that carries 37 automobile brands.
