Cross-Continent Auto Retailers Revives Acquisition of Chaisson Motor Cars
20 October 1997
Cross-Continent Auto Retailers Revives Acquisition of Chaisson Motor Cars
AMARILLO, Texas, Oct. 20 -- Cross-Continent Auto Retailers,
Inc. today announced it has reached a definitive agreement to
acquire Chaisson Motor Cars and Chaisson BMW, a multiple-franchise dealership
group operating in Las Vegas and Henderson, Nevada, for cash, promissory notes
and stock approximating $18.0 million. On August 11, 1997, Cross-Continent
terminated a previous agreement to acquire Chaisson for approximately
$25.0 million.
Chaisson Motor Cars operates a total of three new car facilities in Las
Vegas and Henderson, Nevada. Chaisson is the exclusive dealership for BMW,
Volkswagen, Audi, Land Rover and other specialty luxury vehicles in the Las
Vegas market. Chaisson BMW commenced operations in a recently completed
state-of-the-art facility located at the Henderson Auto Mall in May 1997.
For the nine month period ended September 30, 1997, total revenue for the
Chaisson dealerships approximated $69 million. The dealerships sold 1,118 new
units, 499 used retail units and 445 wholesale units.
Total revenues were $70 million for the year ended December 31, 1996. In
1996 the dealerships sold 1,228 new units, 477 used retail units and 360 used
wholesale units. Reported revenue and unit sales for 1996 do not include
Chaisson BMW in Henderson, Nevada, which commenced business in May 1997.
The transaction will be accounted for as a purchase, is subject to
customary closing conditions, including appropriate approvals, and is expected
to be completed by the end of the fourth quarter.
The acquisition presents exciting prospects for Cross-Continent, according
to Bill Gilliland, Chairman and Chief Executive Officer for Cross-Continent.
"Las Vegas is a very attractive car market," he said. "The Chaisson
dealerships fit our acquisition profile of high-quality, high-revenue
dealerships that builds shareholder value and diversifies further, our
manufacturer sales mix."
Gilliland noted the acquisition complements Cross-Continent's current
position in the Las Vegas market since Chaisson's facilities are located near
the recently acquired Toyota and Nissan dealerships. "The proximity of the
dealerships will enable the company to expand our used vehicle sales
operations, and will allow us to consolidate some of our after-purchase
services, such as parts and service functions.
"Chaisson will serve as a consultant to the company following the
completion of the acquisition, while James J. Chaisson, Jr. will retain the
general management responsibilities of the dealerships. We expect to retain
all existing dealership management," noted Gilliland.
Following the completion of the Chaisson acquisition, Cross-Continent will
represent nine different manufacturers in the Las Vegas market, which
according to recent publications ranks as the nations fastest growing
metropolitan area.
This purchase represents the company's fourth major acquisition following
its initial public offering on September 23, 1996. On October 1, 1996, the
company completed the acquisition of Lynn Hickey Dodge in Oklahoma City. On
April 10, 1997, the company completed the acquisition of Toyota dealerships
located in Las Vegas and the Denver, CO. area. On July 1, 1997, the company
completed the acquisition of Sahara Nissan, Inc. which operates a Nissan
dealership in Las Vegas under the trade name Nissan West.
Gilliland said, "The addition of the Chaisson dealerships helps to keep us
on track of accomplishing our objective of growing to 40 dealerships, with a
revenue 'run-rate' of $2.5 billion within the next three to five years."
Cross-Continent Auto Retailers, Inc. owns and operates a group of
franchised automobile retail dealerships in Texas, Oklahoma, Nevada and
Colorado. Through these dealerships, the company sells new and used cars and
light trucks, arranges related financing and insurance, sells replacement
parts and provides vehicle maintenance and repair services.
Cross-Continent Auto Retailers, Inc. is listed on the New York Stock
Exchange under the symbol XC.
Cross-Continent Auto Retailers, Inc. believes its shareholders benefit
from the views of management about the future of the company's business.
Included herein are forward-looking statements, including statements with
respect to anticipated revenue growth, acquisitions and profitability. These
statements involve risks and uncertainties that could cause actual results to
differ materially, including without limitation economic conditions, risks
associated with acquisitions and the risk factors set forth from time to time
in the company's filings with the Securities and Exchange Commission.
SOURCE Cross-Continent Auto Retailers, Inc.