AutoCanada Inc. Announces Stock and Cash Deal for Investment in a Group of Two General Motors Dealerships
EDMONTON, March 10, 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 a 70% non-voting equity interest in Saskatoon Motor Products Ltd., a Chevrolet dealership located in Saskatoon, Saskatchewan and Mann-Northway Auto Source Ltd., a Chevrolet GMC Buick Cadillac dealership located in Prince Albert, Saskatchewan. The purchase of the two dealerships closed upon obtaining approval from GM Canada.
Based in Saskatoon, Saskatoon Motor Products Ltd. has been serving Saskatchewan for over 60 years with new and used General Motors vehicles. The dealership will operate out of a leased facility which includes a 10 car showroom, 32 service bays and 10 body shop bays. In 2013, the dealership retailed 1,162 new vehicles and 1,068 used vehicles.
Mann-Northway Auto Source Ltd. has also been serving Saskatchewan for over 60 years and offers a full line of Chevrolet, GMC, Buick and Cadillac branded vehicles to Prince Albert and the surrounding region. The dealership will operate out of a leased facility which includes a 10 car showroom, 16 service bays and 10 body shop bays. In 2013, the dealership retailed 649 new vehicles and 468 used vehicles.
The two dealerships are currently owned and operated by Mr. Roger Mann (a third generation dealer) and his son Mr. Robert Mann (a fourth generation dealer) and are the oldest family run General Motors stores in the country. The Mann Family have been General Motors dealers for 100 years since their first store was founded by Andrew Mann in 1914.
In accordance with the terms of the ownership structure for GM dealerships approved by GM Canada, AutoCanada shall purchase a 70% non-voting equity interest, with Mr. Pat Priestner, Chief Executive Officer of AutoCanada, being named Dealer Operator by holding a 15% personal equity interest and voting control of the dealership. Mr. Robert Mann will be named Dealer Owner and will retain a 15% equity interest in the two dealerships and will continue to operate the dealerships. The transaction was reviewed and approved by AutoCanada's independent members of its Board of Directors. AutoCanada will purchase its 70% equity interest in the two dealerships through stock consideration of 205,000 shares and the remainder to be paid in cash. The listing of the shares has received conditional approval from the Toronto Stock Exchange ("TSX").
Commenting on the transaction, Pat Priestner, Chairman and CEO of AutoCanada stated, "We are very pleased and honoured that the Mann family has agreed to join the AutoCanada family through these two very established, high quality and exceptionally well run General Motors stores, each with storied histories in the Province. In addition to closing this exceptional group of dealerships, we are likewise excited to be entering the great province of Saskatchewan which we believe is a very good market for auto retail, and we welcome both Mr. Roger Mann and Mr. Robert Mann to our group and look forward to a long and rewarding relationship."
AutoCanada is one of Canada's largest multi-location automobile dealership groups, currently operating 34 franchised dealerships in seven provinces and has over 1,500 employees. AutoCanada currently sells Chrysler, Dodge, Jeep, Ram, FIAT, Chevrolet, GMC, Buick, Cadillac, Infiniti, Nissan, Hyundai, Subaru, Mitsubishi, Audi, and Volkswagen branded vehicles. In 2012, our dealerships sold approximately 30,000 vehicles and processed approximately 309,000 service and collision repair orders in our 333 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 26, 2013 which is accessible through the SEDAR website at www.sedar.com.
SOURCE AutoCanada Inc.