Sonic Automotive, Inc. to Acquire FirstAmerica Automotive, Inc.
26 August 1999
Sonic Automotive, Inc. to Acquire FirstAmerica Automotive, Inc.
CHARLOTTE, N.C., Aug. 25 -- Sonic Automotive, Inc.
announced today that it has signed a definitive agreement to
acquire FirstAmerica Automotive, Inc., an owner and operator of franchised
automotive dealerships based in San Francisco, California. FirstAmerica
Automotive currently sells 16 new domestic and foreign brands through 21 new
vehicle dealerships in California. FirstAmerica Automotive also expects to
complete the purchase of an additional 8 new vehicle dealerships with 7 brands
in California and Las Vegas, Nevada prior to completing the transaction with
Sonic. The estimated 1999 proforma revenues for FirstAmerica Automotive is
approximately $1.6 billion.
Sonic will exchange 5,100,000 shares of its Common Class A stock for all
of the outstanding shares and equity interests in FirstAmerica and assume debt
of approximately $175 million. Following the closing of the transaction,
FirstAmerica shareholders will hold approximately 15% of the outstanding Sonic
shares. The transaction is subject to regulatory and manufacturers' approval
and is projected to close late in the fourth quarter of 1999. Following the
transaction, Sonic will have 159 franchises in 12 states and is the second
largest public dealership group in the United States.
O. Bruton Smith, Sonic's Chairman and Chief Executive Officer, stated "We
are extremely pleased to bring Tom Price and his exceptional group at
FirstAmerica onto the Sonic team. The two organizations are a perfect fit
from a geographic, product and organizational standpoint. The FirstAmerica
merger gives us a West Coast base of operations and additional geographic and
brand diversity. The management team at FirstAmerica has proven to be
successful at acquiring and integrating dealerships and will be a key element
of our future growth."
FirstAmerica has received numerous awards for exceptional quality and
customer satisfaction. Last year those awards included the Elite of Lexus
Award at Lexus of Serramonte, DaimlerChrysler's Five-Star Certification at
Serramonte Dodge, the Toyota President's Award at Melody Toyota and the Honda
President's Award at Concord Honda.
Thomas Price, President and Chief Executive Officer of FirstAmerica, will
become Vice Chairman and a member of the Board of Directors of Sonic
Automotive, Inc. Mr. Price stated "Sonic has demonstrated its ability to
perform exceptionally well in the public arena and our management team looks
forward to making a significant contribution to the company's future success.
FirstAmerica brings to Sonic an experienced and proven management team with
demonstrated expertise in auto retailing in California markets. The
automotive industry talent and experience represented by the combined
management groups will be the best in the industry."
B. Scott Smith, Sonic's President and Chief Operating Officer, stated "We
see many advantages for Sonic from this transaction. FirstAmerica has a
highly developed Internet strategy as a result of dealing with technologically
sophisticated customers in the major California markets. Our organizations
have very similar cultures and share a common operational and financial
reporting structure. The franchises that make up FirstAmerica Automotive will
complement and improve our brand diversity and mix. We will also gain a base
of operations in several attractive, rapidly growing West Coast metro markets.
California accounted for more than 10% of new vehicle registrations in the
United States in 1998. The size of the combined organizations will allow us
to continue to realize and increase synergies and economies of scale from
initiatives already in place."
Brands represented in the FirstAmerica portfolio include Acura, BMW,
Cadillac, Chevrolet, Chrysler, Dodge, Ford, Honda, Isuzu, Jeep, Lexus,
Mercedes-Benz, Mitsubishi, Nissan, Oldsmobile, Plymouth, Toyota, Volkswagen
and Volvo. Honda/Acura, Toyota/Lexus, DaimlerChrysler, Nissan and BMW
represent approximately 88% of FirstAmerica's proforma 1998 sales.
Sonic Automotive, Inc. is one of the leading automotive retailers in the
United States, with operations in Alabama, California, Florida, Georgia,
Maryland, Nevada, North Carolina, Ohio, South Carolina, Tennessee, Texas, and
Virginia. Upon completion of these acquisitions, Sonic will operate 159
franchises and 31 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.
MANAGEMENT WILL BE HOLDING A CONFERENCE CALL THURSDAY, AUGUST 26, 1999 AT
11:00AM EASTERN TIME. TO PARTICIPATE, PLEASE DIAL: 800-621-6451, ACCESS CODE:
SONIC