Company: GPI
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0001031203-25-000013
Chunk: 67

Company: GROUP 1 AUTOMOTIVE INC
Filing Date: 2025-02-14
Form: 10-K
Item: Item 1A
Chunk 67
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 as well as our ability to acquire dealerships. 

15

Please see Item 1. Business — Competition for further discussion of competition in our industry.

If we are unable to acquire and successfully integrate new dealerships into our business, the growth of our revenues and earnings could be adversely affected.

Growth in our revenues and earnings partially depends on our ability to acquire new dealerships and successfully integrate those dealerships into our existing operations. We cannot guarantee that we will be able to identify and acquire dealerships in the future. In addition, we cannot guarantee that any acquisitions will be successful or on terms and conditions consistent with past acquisitions. Restrictions imposed by our manufacturers, as well as covenants contained in our debt instruments, may directly or indirectly limit our ability to acquire additional dealerships. As competition for acquisitions increases that may result in fewer acquisition opportunities available to us and/or higher acquisition prices, and some of our competitors may have greater financial resources than us.

In addition, acquisitions involve a number of particular risks, including, among other things:

•incurring significantly higher capital expenditures and operating expenses;

•failing to obtain manufacturers’ consents to acquisitions of additional franchises;

•failing to integrate the operations and personnel of the acquired dealerships;

•entering new markets with which we are not familiar;

•incurring undiscovered liabilities at acquired dealerships, generally, in the case of stock acquisitions;

•disrupting our ongoing business;

•failing to retain key personnel of the acquired dealerships;

•failing to implement or improve controls and policies and information systems; 

•impairing relationships with employees, manufacturers and customers; and

•incorrectly valuing acquired entities.

The integration process for acquisitions requires us to expand the scope of our operations and financial and other systems. Our management devotes a substantial amount of time and attention to the process of integrating the operations of acquired dealerships into our business. Additionally, the Company doubled its footprint in the U.K. during the Current Year through its acquisition of Inchcape Retail. Failure to effectively integrate the Inchcape Acquisition into the legacy U.K. operations could negatively impact our operating results in the U.K.

If any of these factors limit our ability to successfully integrate acquired dealerships into our operations or on a timely basis, our expectations regarding future results of operations, including certain run-rate revenue and expense synergies expected to result from acquisitions, might not be met. As a result, we may not be able to realize the expected benefits that we seek to achieve from the acquisitions. In addition