Conant Auto Retail Group of Newport Beach, Calif., which includes the nation's largest Honda dealership, bought Southern California's three-store Fladeboe Automotive Group.
It is CAR Group's largest transaction to date, said owner Dave Conant. "This one strategically fits a geographic map that made a lot of sense for our group," he told Automotive News.
Fladeboe Automotive, founded by Ray Fladeboe in 1961, owned three dealerships, which sold Honda, Volkswagen and Buick-GMC vehicles. They sold a total of 2,900 new and used vehicles a year, Conant said.
CAR Group ranks No. 23 on the Automotive News list of the top 125 dealership groups based in the United States, with retail sales of 22,869 new vehicles in 2013.
Conant said he expects to sell 35,000 new and used vehicles this year with the addition of the Fladeboe dealerships. The acquisition will add about $200 million in annual revenue to CAR Group's current total of about $1 billion, he said.
With the acquisition, the group owns 14 dealerships in California and two in Florida, selling Honda, Toyota, Scion, Ford, Lincoln, Infiniti, Acura, Hyundai and Volkswagen brands. It includes the largest Honda dealership in the country: Norm Reeves Honda Superstore in Cerritos, Calif. That store sells about 8,500 new and used vehicles a year, Conant said. All four of the group's Honda stores in California operate under the Norm Reeves banner.
"I contacted Ray Fladeboe 15 years ago and suggested we talk," Conant said. "It was a long, long courtship. When this came to my desk in February, we were really focused on markets outside California just to diversify. But we felt this would be a good fit for us."
Fladeboe died four years ago at age 85. Denice Fladeboe Mock, his daughter and the group's dealer principal, approved the sale.
Conant said he plans to expand and is eyeing Texas, Arizona and Florida. "It doesn't make sense for us to go into five geographical areas. It would make more sense to build a second platform in one spot," he said. "We don't want to grow just for growth. We want to grow when it's a good strategic fit."