Sonic Automotive Announces Acquisitions of Four New Dealerships
2 March 1999
Sonic Automotive, Inc. Announces Acquisitions of Four New Dealerships and Closes Four Previously Announced AcquisitionsCHARLOTTE, N.C., March 2 -- Sonic Automotive, Inc. announced today that it has entered into definitive agreements to acquire Lute Riley Honda in Dallas, Texas; Sam White Motor City in Houston, Texas; and Charleston Lincoln-Mercury and North Charleston Hyundai in Charleston, South Carolina. The dealerships being acquired have 1998 revenues of approximately $260 million. Combined, these transactions are valued at approximately $50 million. Convertible Preferred Stock will be issued for approximately $11.5 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 or early in the third quarter of 1999. Sonic Automotive is also pleased to announce that it has closed its previously announced acquisitions of Rally Mitsubishi in Nashville, Tennessee; Economy Honda in Chattanooga, Tennessee; Global Imports in Atlanta, Georgia; and Infiniti of Charlotte in Charlotte, North Carolina. New "Hub" Acquisition The acquisition of Lute Riley Honda gives Sonic Automotive its first presence in Dallas, Texas with a premier Honda dealership. Lute Riley Honda is the nation's second largest Honda dealership and provides Sonic with a strong "hub" acquisition to support further growth in the Dallas/Fort Worth market area. The management team at Lute Riley Honda has been an innovator in vehicle leasing programs and Internet marketing. Rene Isip, General Manager of Lute Riley, and his team will bring new expertise to Sonic Automotive in the management of high volume, import dealerships. The transaction also includes Lute Riley Body Shop, a stand-alone collision center. 0. Bruton Smith, the Company's Chairman and Chief Executive Officer, stated, "The Dallas/Fort Worth market is one of the best automobile markets in the United Slates. Sonic now has the ability to execute its `hub and spoke' acquisition strategy in this fast growing market. Sonic is also adding to its complement of outstanding dealer/operators with the addition of Rene Isip to the Sonic management team." "Spoke" Acquisitions Sam White Motor City is a Nissan and Oldsmobile dealership in Houston, Texas. Sonic continues to build market share in this city by adding its fifth dealership in this market. Charleston Lincoln-Mercury and North Charleston Hyundai give Sonic additional presence in South Carolina. These dealerships will become part of Sonic's South Carolina region under the leadership of John Newsome. "Sonic's acquisition approach is driven by returns on investment. Acquisition of `spoke' dealerships, like Sam White Motor City and Charleston Lincoln-Mercury, gives Sonic the opportunity to leverage its existing infrastructure and earn a higher return on capital," stated B. Scott Smith, the Company's President and Chief Operating Officer. 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 99 franchises and 25 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.