공시 • Dec 08
Sonic Automotive, Inc. (NYSE:SAH) completed the acquisition of RFJ Auto Partners, Inc. from The Jordan Company, L.P. and others.
Sonic Automotive, Inc. (NYSE:SAH) entered into a definitive agreement to acquire RFJ Auto Partners, Inc. from The Jordan Company, L.P. and others on September 17, 2021. Under the terms of Merger Agreement, the purchase price payable by Sonic pursuant to the Merger Agreement is expected to be (i) approximately $700 million for the goodwill and other intangible assets and real estate assets of RFJ Auto and each of its subsidiaries (collectively, the “Company Entities”) i.e. Real Property Purchase Price amount equal to $121,709,171 and Blue Sky Purchase Price amount equal $575,000,000, plus (ii) the sum of the values, as determined in accordance with the terms of the Merger Agreement, of each the parts and accessories inventory, the fixed assets and equipment, the supplies and the repair work-in-process of the Company Entities, plus (iii) the value of the new and used vehicle inventories of the Company Entities, which inventories are expected to be funded through borrowings under Sonic’s existing floor plan credit facility. Pursuant to the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), (i) each share of common stock, par value $0.01 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time will be converted into one share of common stock, par value $0.01 per share, of the surviving corporation in the Merger; (ii) each share of common stock, par value $0.001 per share, Series A preferred stock, par value $0.001 per share, and Series B voting preferred stock, par value $0.001 per share, of the Company will be cancelled and retired, and no cash or other consideration will be delivered or deliverable with respect thereto or in exchange therefor. As a part of acquisition, Adjustment Escrow Amount has been set to an amount equal to $5 million and an Indemnity Escrow Amount equal to $71.9 million with the escrow agent Bank of America, N.A. The transaction will add six incremental states to Sonic’s geographic coverage and five additional brands to its portfolio, including the highest volume Chrysler Jeep Dodge RAM dealer in the world in Dave Smith Motors. The transaction has been financed with debt and cash on hand, and our pro forma credit facility leverage ratio will remain comfortably within our targets. On October 13, 2021, Sonic Automotive, Inc. subject to market conditions, will offer senior notes due 2029 and senior notes due 2031 in an offering that is exempt from the registration requirements of the Securities Act. Sonic intends to use the net proceeds from the offering of the Notes, together with additional borrowings and cash on hand, to (i) fund, if consummated, the Acquisition pursuant to an Agreement and Plan of Merger, dated as of September 17, 2021. The senior notes will be priced at $1.15 billion, proceeds of which will be used for the acquisition. Sonic Automotive, Inc. executed its offering of US$650 million aggregate principal amount of 4.625% senior notes due 2029 and US$500 million aggregate principal amount of 4.875% senior notes due 2031. Sonic intends to use the net proceeds from the offering of the Notes, together with additional borrowings, to fund, if consummated, the acquisition of RFJ Auto Partners, Inc.
Post completion of the acquisition, RFJ Auto Partners would be the surviving company in the Merger and continue its company existence under the DGCL as a wholly owned subsidiary of Sonic. Upon termination of the Merger Agreement under certain specified circumstances, Sonic or the Company may be required to pay the other party a termination fee of either $2.5 million (Initial Diligence Period Parent Termination Fee) or $7.5 million (Diligence Period Parent Termination Fee), depending on the timing of the termination as set forth in the Merger Agreement. RFJ Auto generated $2.8 billion in annual revenues in 2020.
The consummation of the Merger is subject to various closing conditions, including, among other things, (i) the expiration or termination of all applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and (ii) the consent to or the approval of the transactions contemplated by the Merger Agreement by each Manufacturer (as defined in the Merger Agreement) whose consent or approval is required and requisite approval of the RFJ’s equity holders. The transaction has been unanimously approved by the Board of Directors of RFJ Auto and the Board of Directors of the Sonic. The RFJ Auto transaction is expected to close in December 2021. The RFJ Auto transaction is expected to close in fourth quarter of 2021. The transaction is expected to add $3.2 billion in annualized revenues, representing an incremental 30% increase in franchised dealership revenues above the Company’s previously stated target of $25 billion in total revenues by 2025.
Lazard acted as financial advisor and Kevin B. Gottehrer of Parker Poe Adams & Bernstein LLP acted as legal counsel to Sonic. Cowen acted as the financial advisor and Ejim P. Achi, Esq. and Todd Bowen, Esq. of Greenberg Traurig, LLP acted as legal counsel to RFJ Auto Partners.
Sonic Automotive, Inc. (NYSE:SAH) completed the acquisition of RFJ Auto Partners, Inc. from The Jordan Company, L.P. and others on December 7, 2021.