After hitting new all-time highs on Friday, the Eagers Automotive Ltd (ASX: APE) share price is moving higher again today.
That's after the company announced a major asset sale to United States-based, privately owned Velocity Vehicle Group (VVG).
The Eagers share price hit new all-time highs on Friday, closing at $13.53 per share, after releasing an unexpectedly strong trading update. Today at the time of writing, shares in the automotive company are trading at $14.17, up 4.73%.
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What's driving the Eagers share price today?
In an ASX announcement this morning, Eagers Automotive reported the sale of its Daimler truck business to Velocity Vehicle Group, a privately owned company operating 36 commercial truck dealerships in the US.
According to Eagers, the sale will deliver a net gain of approximately $32–36 million. Part of the deal includes the sale of Eagers' Milperra property, where its Stillwell Trucks operation is based.
Eagers Automotive advised it will continue to own and operate its Webster Truck and Isuzu Truck businesses, already part of its automotive retail division. It plans to incorporate its Hino and Iveco businesses into its automotive retail division after the transaction is complete.
The company said the sale is in line with its continuing process to simplify its business model.
Commenting on the asset sale, Eagers CEO Martin Ward said:
The divestment of our Daimler truck operations represents another key step in the ongoing simplification of our automotive retail business. VVG will be a great home for the Daimler truck business and offers an exciting future.
Eagers Automotive company and share price snapshot
Eagers Automotive operates new and used car, truck and bus dealerships across Australia and New Zealand. Formerly AP Eagers Ltd, the company's origins go way back to 1913.
Today, Eagers' portfolio spans over 200 new car dealerships. Eagers also owns more than $300 million worth of real estate in prime locations across the nation.
Shares of the company first began trading on the Australian exchange in 1957. Today, with a market cap of $3.5 billion, Eagers is part of the S&P/ASX 200 Index (ASX: XJO).
The Eagers share price was savaged by the COVID-19 market rout earlier in the year. Shares plummeted 72% from mid-January through to 25 March.
The rebound since then has been remarkable. With the share price up 367% from the March lows, Eagers Automotive shares are up 36% year-to-date.
