LMP Automotive says seller in terminated deal will retain $1.5 million deposit
LMP Automotive Holdings Inc. said the seller in a proposed transaction in which it was to buy five import dealerships in Texas will retain a $1.5 million deposit under the terms of the contract, which was terminated this week.
The Fort Lauderdale, Florida-based, publicly traded company said in a Thursday Regulatory Filing that its asset purchase agreement to purchase dealerships from Steve McGavock was terminated on Monday. In A press releaseLMP CEO Samer Tawfik said the termination happened “due to the expiration of the closing deadline”.
In September, LMP announced plans to acquire four Nissan dealerships in Abilene, Amarillo, San Marcos and Lubbock and an Infiniti store in Lubbock from McGavock, head of McGavock Auto Group. The deal also included real estate.
LMP said the transaction, which is expected to generate approximately $592 million in annual revenue, was expected to close in the fourth quarter.
The company in a September press release said it would pay about $62.5 million in goodwill for dealerships and $55 million for real estate. He said he would pay for this acquisition in cash and debt, with up to $6.25 million paid in common stock. But one regulatory filing that monthwhich included a copy of the agreement, set the purchase price at $61.5 million, of which up to $10 million could be paid for in common stock.
McGavock and a representative from National Business Brokers, the Irvine, Calif., buy-sell firm that handled the transaction, could not immediately be reached for comment.
This is the latest acquisition completed for LMP, which completed its first franchise dealer acquisitions early last year and entered into numerous dealer purchase agreements. It has just over half a dozen rooftops in its portfolio.
In one January regulatory filing, LMP said its proposed acquisition of a Hyundai dealership in West Virginia was also terminated, on Dec. 31, under the terms of its purchase agreement. LMP, in that filing, said “the company has not incurred any material termination penalties as a result of this termination.”
In the first three quarters of 2021, LMP generated net income of $1.1 million, including $4.77 million in the third quarter. As of September 30, LMP had $18.8 million in cash, although it noted that more than $10.8 million in cash was restricted.
The company, which aspires to consolidate dozens of dealerships, announced seven more acquisitions it said were expected to close in the fourth quarter. In a press release on Thursday, LMP’s Tawfik said the company expects from February “to close nearly all of the remaining seven acquisitions under contract during the first quarter of this year on a rolling basis. , subject to customary closing conditions, financing and manufacturer approvals”.
In late December, Tawfik said in a press release that LMP had “engaged Bank of America” to help refinance its debt.
Tawfik, in the release this week, said his company continues to work with “potential lenders to provide the debt financing necessary to complete these acquisitions.”
Separately this week, LMP said it pay $29 million in an agreement to purchase property in Elmsford, NY, to relocate and expand its White Plains Chrysler-Dodge-Jeep-Ram dealership in New York. It acquired an 85% stake in this concession in October. The company said the acquisition of the property is expected to be finalized in the second quarter and should be operating from the site by the fourth quarter.
“This is a trophy property located in one of the busiest areas of Westchester County,” LMP Chief Operating Officer Richard Aldahan said in a statement. “The property is planning a significant modernized expansion of service bays, showroom and additional parking for hundreds more vehicles.”