AutoCanada Inc. Announces GM Canada Approval of Investment in Cadillac Buick GMC Dealership
EDMONTON, March 31, 2014 /PRNewswire/ - AutoCanada Inc. ("AutoCanada" or the "Company") (TSX: ACQ) announced today that it has obtained approval from General Motors of Canada ("GM Canada") to purchase an 80% non-voting equity interest in the assets of McNaught Cadillac Buick GMC ("McNaught"), a Cadillac Buick GMC dealership located in Winnipeg, Manitoba. The acquisition is expected to close April 1, 2014.
McNaught Cadillac Buick GMC was founded by Mr. Gord McNaught Sr. nearly four decades ago and is currently operated by his two sons, Mr. Gord McNaught Jr. and Mr. Andrew McNaught, who will continue to operate the dealership from its current leased facility which includes a 10 car showroom, 24 service bays and 10 body shop bays. As part of the purchase agreement terms, AutoCanada will purchase the dealership facility on or before March 31, 2016. In 2013, the dealership retailed 593 new vehicles and 520 used vehicles.
In accordance with the terms of the previously announced ownership structure for GM dealerships approved by GM Canada, AutoCanada shall purchase an 80% non-voting equity interest. Mr. Pat Priestner, Chief Executive Officer of AutoCanada, shall be named Dealer Operator, and, together with other senior managers, shall purchase a 20% equity interest, with Mr. Priestner holding 100% voting control of the dealership. The transaction was reviewed and approved by AutoCanada's independent members of its Board of Directors.
Commenting on the transaction, Pat Priestner, Chairman and CEO of AutoCanada stated, "We are very excited to add a fourth dealership to our Winnipeg platform, a market which has proven to be very good for auto retail. A new brand for us in Winnipeg and an additional dealership allows us to continue to build scale in the city. We would like to thank General Motors of Canada for its continued support of our efforts to expand our offerings of these highly desirable brands which we believe will continue to grow in market share. We would also like to welcome the McNaught family, and all of the McNaught dealership employees, to the AutoCanada family, with whom we look forward to building a strong and lasting relationship."
AutoCanada is one of Canada's largest multi-location automobile dealership groups, currently operating 34 franchised dealerships in seven provinces and has over 1,600 employees. AutoCanada currently sells Chrysler, Dodge, Jeep, Ram, Fiat, Chevrolet, GMC, Buick, Cadillac, Infiniti, Nissan, Hyundai, Subaru, Mitsubishi, Audi, and Volkswagen branded vehicles. In 2013, our dealerships sold approximately 36,000 vehicles and processed approximately 364,000 service and collision repair orders in our 381 service bays during that time.
Certain statements contained in this press release are forward-looking statements and information (collectively "forward-looking statements"), within the meaning of the applicable Canadian securities legislation. We hereby provide cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in these forward-looking statements. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and are forward-looking and may involve estimates and assumptions and are subject to risks, uncertainties and other factors some of which are beyond our control and difficult to predict. Accordingly, these factors could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Therefore, any such forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this release and as contained in the Company's Annual Information Form dated March 20, 2014 which is accessible through the SEDAR website at www.sedar.com.
SOURCE AutoCanada Inc.