Sonic Automotive Announces Acquisitions of Five New Dealerships
5 February 1999
Sonic Automotive, Inc. Announces Acquisitions of Five New Dealerships and Closes Previously Announced Acquisition
CHARLOTTE, N.C., Feb. 4 -- Sonic Automotive, Inc.
announced today that it has entered into definitive agreements to acquire
Lloyd Pontiac-Cadillac-GMC and Lloyd Nissan (including Nissan and Mercedes
franchises) in Panama City, Florida; Fred Bondesen
Chevrolet-Oldsmobile-Cadillac in DeLand, Florida; Superior
Oldsmobile-Cadillac-GMC in Cleveland, Tennessee; and Fitzgerald Chevrolet in
Monroe, North Carolina. The dealerships being acquired have 1998 revenues of
approximately $156 million.
Combined, these transactions are valued at approximately $17.7 million.
A combination of Class A Common Stock and Convertible Preferred Stock will be
issued for approximately $34 million of the purchase price, and the remainder
will be payable in cash. All of these acquisitions are expected to close by
the end of the second quarter of 1999.
Sonic Automotive is also pleased to announce that it has closed its
previously announced acquisition of Ron Craft Chrysler-Plymouth-Jeep and Ron
Craft Chevrolet-Cadillac-Oldsmobile in Baytown, Texas.
Florida Acquisitions
The acquisition of Lloyd Pontiac-Cadillac-GMC and Lloyd Nissan gives Sonic
Automotive its first dealerships in Panama City, Florida. Included in this
acquisition are five additional franchises representing three different
brands, including Sonic's third Mercedes franchise and first Nissan franchise.
Fred Bondesen Chevrolet-Oldsmobile-Cadillac is located in DeLand, Florida
near Sonic's Higginbotham dealerships "hub" in Daytona Reach, Florida. The
Bondesen acquisition adds more General Motors franchises to Sonic's existing
products and diversifies its holdings and its mix.
"These acquisitions represent continuation of Sonic Automotive's
disciplined growth strategy. In existing markets, we are not only looking to
increase market share but diversify our brand mix as well," stated 0. Bruton
Smith, Chairman and Chief Executive Officer of Sonic Automotive, Inc.
Tennessee Acquisition
The acquisition of Superior Oldsmobile-Cadillac-GMC in the Chattanooga,
Tennessee market increases Sonic's number of dealerships in the Chattanooga
area from seven to eight. The Company will have its first General Motors
franchises in this market. Sonic currently owns and operates Ford, Chrysler,
Plymouth, Jeep, Dodge, Honda, Infiniti, BMW, Volvo, Volkswagen, and Kia
franchises in Chattanooga and Cleveland, Tennessee.
North Carolina Acquisition
Fitzgerald Chevrolet is located in Monroe, North Carolina and will give
Sonic its tenth dealership in the Charlotte market. Operations of Fitzgerald
Chevrolet will be combined with Sonic's existing Oldsmobile-Cadillac
dealership in Monroe as part of General Motors project 2000 plan.
B. Scott Smith, Sonic's President and Chief Operating Officer, stated,
"These acquisitions announced today demonstrate that Sonic is committed to its
'hub and spoke' acquisition strategy. We are executing our stated strategies
and developing Sonic's market share in related markets. Sonic is also
balancing our portfolio of dealerships by broadening our representation of the
fine products of General Motors, Nissan and Mercedes."
Sonic's management believes that, when combined with other corporate
activities, these acquisitions will add approximately 5% to fiscal year 1999
earnings.
Sonic Automotive, Inc. is one of the leading automotive retailers in the
United States, with operations in Alabama, Florida, Georgia, North Carolina,
Ohio, South Carolina, Tennessee and Texas. Upon completion of these
acquisitions, Sonic will operate 94 franchises and 21 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 recent filings with
the Securities and Exchange Commission.