Group 1 Automotive to Acquire Four Dealership Groups
18 December 1997
Group 1 Automotive to Acquire Four Dealership Groups
Will Enter Two New Markets and Boost Annualized Revenues to $1.3 Billion
HOUSTON, Dec. 18 -- Group 1 Automotive, Inc.
announced today that it has signed definitive agreements to acquire four
automotive dealership groups with aggregate 1996 revenues of over $470 million
and retail unit sales of 19,000 cars and trucks. These acquisitions include
19 dealership franchises in five markets and, upon completion, will bring
Group 1's annualized revenue run rate to approximately $1.3 billion,
representing 57,000 retail car and truck sales.
These acquisitions include the Carroll Automotive Group with three Ford
dealerships located in Fort Lauderdale, Fla., Miami and Atlanta; the Maxwell
Automotive Group, with one Chrysler, Plymouth dealership and one Chrysler,
Plymouth and Subaru dealership in Austin, Texas, and one Chrysler, Plymouth,
Jeep, Eagle and Dodge dealership in Taylor, Texas, located near Austin; Elgin
Ford, also located near Austin; and an automall in Beaumont, Texas, that
houses Mercedes-Benz, Dodge, Nissan, Volvo and Buick franchises.
The consideration for the four separate transactions is approximately $36
million cash and 2,190,000 shares of Group 1 common stock. Upon completion of
the acquisitions, expected during the first quarter of 1998, Group 1 will own
48 dealership franchises and nine collision service centers located in Texas,
Oklahoma, Florida and Georgia. The acquisitions are subject to customary
closing conditions, including approval of various manufacturers and the
completion of due diligence.
Fort Lauderdale-based Carroll Automotive Group is among the Top 100 dealer
groups in terms of revenues in the United States, according to Automotive
News. Jim Carroll, chairman, and his management team will execute long-term
employment contracts and retain their current duties. Carroll has 30 years of
experience in automotive retailing. "We looked at many if not all of the
alternatives available for the future of our company," Carroll said. "We felt
that our merger with Group 1 was the best decision for the owners, our
families, our employees and our customers. Group 1's premier dealer groups
coupled with a management team with proven consolidation and financial
expertise make them the 'dealers' choice' for us."
Austin-based Maxwell Automotive Group will strengthen Group 1's current
market position and provide important brand diversity. Nyle Maxwell,
president, and his management team will execute long-term employment contracts
and continue in their current positions. Maxwell has 15 years of experience
in automotive retailing. "The Group 1 association allows me to continue to
expand in the Austin market by utilizing Group 1's expertise and access to the
public capital markets," said Maxwell. "It is the best of all worlds for us
because it lets me continue to provide growth opportunities for our employees
while allowing me to focus my efforts on what I do best -- running
competitive, customer-oriented dealerships."
The Elgin Ford dealership and the automall in Beaumont will augment the
company's current operations and will be run by existing local management.
B.B. Hollingsworth Jr., Group 1's chairman, president and chief executive
officer, said, "We are very excited about these acquisitions, our first since
completing our initial public offering in October 1997. With these
acquisitions we improve our brand diversity, gain geographic diversity,
establish platforms in three new, fast-growing markets -- Atlanta, Fort
Lauderdale and Miami -- and enhance our market position in the Austin and
Beaumont markets.
"Our new partners from the Maxwell and Carroll Groups complement and
strengthen our management team and will provide tremendous insight into their
local markets," Hollingsworth continued. "We are also pleased to have Nyle,
Jim and their associates as significant new shareholders of Group 1."
Hollingsworth noted that the Ford dealership near Austin and the Beaumont
group of franchises represent Group 1's first "tuck-in" acquisitions --
smaller dealerships that offer brand diversity, enhanced economies of scale
and a greater breadth of products and services in existing markets. "These
two tuck-in acquisitions meet our criteria since they will allow us to realize
further economies of scale and deliver additional operating leverage,"
Hollingsworth stated.
Group 1 was founded to become a leading operator and consolidator in the
highly fragmented automotive retailing industry and completed its initial
public offering in October 1997. Following the completion of the pending
acquisitions, Group 1 will own 48 dealership franchises comprised of 24
different brands, and nine collision service centers located in Texas,
Oklahoma, Florida and Georgia. Through these dealerships, the company sells
new and used cars and light trucks, provides maintenance and repair services,
sells replacement parts and provides related financing, insurance and
service contracts.
This press release contains certain forward-looking statements within the
meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934,
which involve known and unknown risks, uncertainties or other factors not
under the company's control which may cause the actual results, performance or
achievement of the company to be materially different from the results,
performance or other expectations implied by these forward-looking statements.
Some of these risks and factors include, but are not limited to, those
disclosed in the company's October 29, 1997 Prospectus filed with the
Securities and Exchange Commission.
SOURCE Group 1 Automotive, Inc.
