Penske Automotive Group (PAG) Acquires Stake in Penske Truck Leasing; Sees Increase to 2008 Earnings

July 1, 2008 4:59 PM EDT

Penske Automotive Group, Inc. (NYSE: PAG) has acquired a 9% limited partnership interest in Penske Truck Leasing Co., L.P. ("PTL") from GE Capital for $219 million.

Penske Automotive Group Chairman Roger Penske said, "We view the opportunity to invest in PTL as an outstanding use of capital. In addition to expected earnings accretion, we anticipate significant cash flow from partnership operating distributions and U.S. tax savings over the next three to five years to recoup a substantial portion of our investment."

In connection with the transaction, Penske Automotive's U.S. credit agreement was expanded to include an additional $219 million of non-amortizing term loans, which were used to fund the acquisition of the PTL limited partnership interests. Including the term loans, the total commitment under the U.S. credit agreement was increased to $479 million, allowing available credit for continued investment in the Company's core retail automotive strategies.

The Company projects an increase to 2008 earnings relating to the PTL transaction in the range of $0.02 to $0.04 per share and expects to update third quarter and full year 2008 guidance on its second quarter earnings conference call scheduled for July 30, 2008.[SM]

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