We Don't Expect Group 1's CEO Change to Lead to Major Change From the Company's Current Path

Group 1 announced on Aug. 24 that president and CEO Earl Hesterberg, 69, will retire at the end of the year and leave the board at that time. Hesterberg has been CEO since joining Group 1 in April 2005. Daryl Kenningham, 58, president of the U.S. business and an 11-year veteran of the firm, will succeed Hesterberg. Kenningham is also now promoted to president and COO. Kenningham has about 35 years of automotive experience including time with Nissan in the U.S. and Japan and about 13 years with distributor Gulf States Toyota holding various senior roles in finance, marketing, and logistics. Kenningham was also president of Group 1’s now sold Brazil segment, so we think he has plenty of international experience to handle Group 1’s U.K. operations. We are not changing our fair value estimate, and we expect Kenningham to continue on the same path Hesterberg led, which is one focused on continued acquisition growth in the U.S. and U.K. while also continuing the omnichannel initiatives via Group 1’s Acceleride tool.