Asbury Automotive Group Inc. spent $2.7 million during the fourth quarter on “a significant acquisition that did not materialize,” the company said Thursday.

Asbury’s sale of nine North Carolina stores in the fourth quarter was also partly agreed to in anticipation of the unconsummated purchase, CEO David Hult told analysts and investors on a call.

Asbury did not specify a reason for the “significant” deal’s lack of completion, and it was unclear from Hult and Asbury’s comments if the auto retailer had abandoned that transaction entirely. Asbury also did not specify what expenses consumed the $2.7 million other than for “deal diligence.”

On the call, Morningstar Inc. analyst David Whiston asked for clarification on what Asbury considered a “large” or “significant” acquisition in light of the group’s purchase of Larry H. Miller Dealerships in December 2021. That $3.2 billion transaction included Asbury purchasing 61 franchised and used-only stores and finance-and-insurance product provider Total Care Auto.

Hult said most acquisition prospects — including this target — weren’t the size of Larry H. Miller. “They’re extremely rare,” Hult said of such megadeals.

On a scale between a single store and a group with 60 dealerships, “this probably would have been somewhere in the middle of the two,” Hult said of the recent prospect. The target was “very healthy” in size, but not as large as Larry H. Miller, he said.

Hult said Asbury’s pursuit of that acquisition also contributed to his Duluth, Ga., group’s decision to sell nine North Carolina dealerships, representing about $590 million in annual revenue, to Hudson Automotive Group of Charleston, S.C. Asbury said it received $322 million in proceeds from the deal.

“The divestiture of the North Carolina stores was partly due to the anticipation of the new acquisition coming on and making sure we maintained a balance of cash flow and kept our leverage proper,” Hult said.

When the anticipated deal failed to arise, Asbury was already under contract to sell the North Carolina dealerships, Hult said.

Asbury wants to grow its annual revenue to $32 billion in 2025 and has said acquisitions will be part of how it gets there. It generated $15.4 billion in revenue last year.

Asbury had $1.5 billion in liquidity and a debt ratio of 1.7 times earnings at the end of the fourth quarter, and CFO Michael Welch said Thursday the company’s access to cash and low debt gave it a large capacity to purchase dealerships or buy back stock. He called it a “good place for 2023.”

Asbury bought about 1.6 million shares of its own stock for a combined $300 million in 2022, and its board has approved the company to buy back $200 million more in stock.

Asbury ranks No. 5 on Automotive News‘ most recent list of the top 150 dealership groups based in the U.S., retailing 109,910 new vehicles in 2021.