Rush Enterprises Inc., already far and away the nation’s largest network of new and used commercial truck dealerships, is spending $205 million to acquire 16 more dealerships from Summit Truck Group.
It is the biggest acquisition in Rush’s 26-year history, bringing to 125 the number of franchised locations in 22 states. The newly acquired International brand dealerships consist of five locations in Arkansas, three in Kansas, seven in Missouri and one in Tennessee.
Also in the deal: eight Idealease commercial vehicle leasing operations, five in dealerships and three stand-alone facilities; a used truck sales facility in Kansas City, Missouri; a collision center in Memphis, Tennessee; and a Wichita Falls, Texas, facility that Rush will operate as a full-service Peterbilt dealership.
“This acquisition will strengthen our dealership network in several of the most important trucking markets in the United States,” W. M. “Rusty” Rush, chairman, CEO and president, said in a press release.
Rush Enterprises (NASDAQ: RUSHA), which is trading near its 52-week high share price, had revenues of $ 4.7 billion in 2020. The dealerships and other businesses acquired from Summit Truck Group had unaudited revenues of approximately $450 million in 2020.
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The San Antonio-based company expects an immediate gain in cash flow and earnings. The company purchased about $56 million in real estate from Summit affiliates.
Rush will finance approximately $102 million of the $205 million purchase price under its floor plan and lease and rental truck financing arrangements.
Joint venture with Cummins
Separately, Rush recently formed a 50-50 joint venture with Cummins Inc. (NYSE: CMI) to work with its Momentum Fuels subsidiary on simplifying on-board storage of natural gas.
“What Rusty is trying to do, because he works with these trucking companies a lot, is lower the cost of that carrying equipment,” Tom Linebarger, Cummins chairman and CEO, told FreightWaves.