Crown Group Acquires America's Car-Mart, Inc.
19 January 1999
Crown Group Acquires America's Car-Mart, Inc.; Acquisition Expected to Increase Crown's FY2000 Earnings by $0.50 Per Share
DALLAS--Jan. 19, 1999--Crown Group, Inc. today announced that it has completed the purchase of America's Car-Mart, Inc. ("Car-Mart") for approximately $41 million, plus the assumption of approximately $2 million in liabilities.Financing of the transaction included $9.8 million in cash from Crown, a $7.5 million five-year note to the sellers, and proceeds from a $30 million revolving credit facility provided by BankAmerica Business Credit.
Headquartered in Rogers, Ark., Car-Mart is one of the largest "Buy-Here Pay-Here" used car dealers in the United States, with annual revenues of $52 million in its latest fiscal year. Car-Mart underwrites, finances and services retail installment contracts generated by its 30 dealerships located in niche markets throughout Arkansas, Oklahoma, Texas and Missouri. Car-Mart presently services over 15,000 retail installment contracts, representing approximately $47 million in net finance receivables.
"We believe that Car-Mart is one of the most successful 'Buy-Here Pay-Here' used car retailers in America, and the company has been consistently profitable throughout its eighteen-year operating history," stated Edward R. McMurphy, President and Chief Executive Officer of Crown Group, Inc. "Car-Mart currently sells about 12,000 used cars annually, and we expect its sales to approximate $70 million in our fiscal year ending April 30, 2000. We plan to expand Car-Mart's dealership network in non-metropolitan markets, where the company has developed a strong brand identity as a retailer of dependable used cars which provides quality aftermarket service to its customers."
"Car-Mart will be accretive to Crown's earnings during the fourth quarter of our current fiscal year, and we expect this acquisition will increase our earnings per share by approximately $0.50 in the fiscal year ending April 30, 2000," continued McMurphy. "Car-Mart's successful business model of selling and financing quality used cars to customers in non-urban markets should complement our Paaco Automotive Group subsidiary, which sells and finances quality used cars primarily to Hispanic customers in metropolitan markets. The combined annualized revenues of these two subsidiaries, which currently exceed $130 million, represent less than 0.5% of the used car market in the U.S., and we believe there are ample opportunities for expansion in new and existing markets as we move into the 21st Century."
Crown Group, Inc. is a publicly traded buy-out firm which seeks to enhance shareholder value through the acquisition, development and operation of small-cap companies with significant growth potential. Crown Group currently owns (i) 100% of America's Car Mart and 65% of Paaco Automotive Group, vertically integrated used car sales and finance companies; (ii) 100% of Precision IBC, a firm specializing in the sale and rental of intermediate bulk containers; (iii) 80% of Concorde Acceptance Corporation, a sub-prime mortgage lender; (iv) 49% of Casino Magic Neuquen, a casino operator in the Province of Neuquen, Argentina; and (v) 80% of Home Stay Lodges, a partnership which is involved in the development and operation of extended-stay lodging facilities.
Crown Group, Inc. is headquartered in Dallas, and its common stock is traded on Nasdaq under the symbol "CNGR".
This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect," or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, changing economic conditions, changes in interest rates, continued acceptance of the Company's products and services in the marketplace, competitive factors, dependence upon lenders, and other risks detailed in the Company's periodic filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.