The deals, announced since July 19 and each expected to close in the fourth quarter, are the latest planned acquisitions for the small public auto retailer that bought its first half dozen franchised dealerships in the first quarter for $143.6 million. In May, it bought an 85 percent stake in a Subaru store in Mount Hope, W.Va., for $3.2 million.
LMP said the two Texas dealerships are expected to generate $250 million in annual revenues.
LMP and sellers David Peacock and partner Aldo B. Paret entered into an asset purchase agreement July 16, according to a regulatory filing, to buy Tom Peacock Cadillac and Tom Peacock Nissan for $120 million. Up to $42 million of that $120 million could be paid in shares of LMP stock, while the rest would be paid in cash and debt financing, LMP said. The deal also looks to include about $21 million for real estate.
At the end of the March, LMP had $8.5 million in cash and $10.9 million in restricted cash per its debt agreement.
This would be LMP’s first entry into the South Central U.S. region and in the popular Texas market.
“We intend to continue expanding aggressively in this region,” LMP COO Richard Aldahan said in a statement. “This acquisition significantly increases LMP’s management team and revenues in this important region along with materially enhancing LMP’s profitability and expanding its reach with a growing reservoir of new- and used-vehicle inventory.”
Tom Peacock Cadillac has been in business more than four decades. Cadillac wanted the seller to “materially upgrade” the Cadillac facility and “offered material consideration to do so,” but the seller declined, according to the purchase agreement.
Paret declined to comment on the sale.
The Presidio Group is representing Peacock and Paret in the transaction, according to the purchase agreement.
The Kia dealership, which LMP did not immediately identify, is expected to generate $40 million in annual revenues. LMP said it would pay for that store using cash and debt financing.
The Chrysler-Dodge-Jeep-Ram store in New York, also which LMP did not immediately identify, is expected to generate $80 million in annual revenues , the company said. LMP said it would pay for the store and real estate through cash, $5.6 million in common stock and debt.
In March, LMP said it would buy 85 percent stakes in Central Avenue Chrysler-Jeep-Dodge-Ram in Yonkers. N.Y., and White Plains Chrysler-Dodge-Jeep-Ram in New York from Jonathan Grant and partners. LMP has said it is slated to close on those stores in the third quarter.
LMP said the acquisitions are subject to certain conditions such as approval from automakers.
“This brings us a step closer to our goal of having approximately 100 dealerships in our network by the end of next year,” LMP Automotive CEO Samer Tawfik said in a statement.
The company also this month hired a new CFO, Robert Bellaflores. He had served as LMP’s senior corporate controller since mid April.
Bellaflores, who was 56 when his appointment was announced, has more than three decades of accounting experience and replaces Evan Bernstein who left the position after about eight months. Bellaflores will earn a base salary of $360,000 a year, according to a regulatory filing.
Tawfik had temporarily served as acting CFO.