Sonic Automotive, Inc. Announces Acquisition of Two Dealership Groups
24 March 1998
Sonic Automotive, Inc. Announces Acquisition of Two Dealership Groups
CHARLOTTE, N.C., March 24 -- Sonic Automotive, Inc.
announced today it has entered into definitive agreements to
acquire the Hatfield Automotive Group in Columbus, Ohio and the Capitol Group
in Montgomery, Alabama. These groups have combined 1997 revenues of $400
million. Included in these transactions are Chevrolet, Toyota, Lincoln-
Mercury, Dodge, Jeep, Chrysler-Plymouth, Hyundai, Isuzu, Subaru, Mitsubishi,
Kia and Volkswagen franchises.
These transactions are valued at approximately $54 million, with up to an
additional $3 million contingent on future performance. Convertible preferred
stock will be issued for $18 million of the purchase price. The remainder of
the purchase price will be payable in cash. Closing of these acquisitions is
expected in the second quarter of 1998 or early in the third quarter of 1998.
"These transactions represent execution of our strategy to acquire large
dealership groups in new markets. From these "hubs," we will further develop
market share in selected markets. We are also continuing to improve our brand
diversity," stated 0. Bruton Smith, the Company's Chairman and Chief Executive
Officer.
The Hatfield Automotive Group is led by Bud and Dan Hatfield. Bud
Hatfield has more than 25 years automotive experience and 17 years experience
as a dealer principal and Dan Hatfield has been a dealer since 1988. Trader
Bud's Westside Dodge was the 9th largest Dodge dealership in the United States
in 1997. The Hatfields have been Five Star award winners for Chrysler
Corporation and recipients of the Toyota President's Award. Mr. Bruton Smith
stated, "The Hatfields are two more outstanding automotive retailers joining
Sonic Automotive." Mr. Bud Hatfield stated, "I'm pleased to join Sonic
Automotive and believe working with the Sonic Automotive team, we can expand
on what Dan and I have accomplished in the Columbus area."
The Hatfield Automotive Group has a significant presence in the Columbus,
Ohio market. Columbus is the nation's 29th largest metropolitan area and one
of the fastest growing markets in the United States. "We're pleased to have a
strong entrance into this market. Sonic Automotive expects to further develop
our market share in Columbus under the leadership of Bud and Dan Hatfield,"
stated Mr. Smith.
Capitol Chevrolet has been in operation in Montgomery, Alabama since 1919
and is one of the largest Chevrolet dealerships in the Southeastern United
States. "This acquisition further enhances our brand diversity with our first
large acquisition of a General Motors franchise. Montgomery is also an
example of the medium-sized markets we believe provide some of the best
opportunities for Sonic Automotive," stated Mr. Smith.
On March 23, 1998, Sonic Automotive completed its purchase of Clearwater
Toyota, Clearwater Mitsubishi and the Clearwater Collision Center.
Upon completion of these acquisitions, Sonic Automotive will operate 31
dealerships representing 21 different brands and 10 collision repair centers.
Included herein are forward-looking statements, including statements with
respect to anticipated revenue growth. There are many factors which affect
management's views about future events and trends of the Company's business.
These factors involve risk and uncertainties that could cause actual results
or trends to differ materially from management's view, 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 Sonic Automotive, Inc.