NEW YORK - A subsidiary of Japan's giant Marubeni Corp. last week paid $50 million in cash for a controlling interest in the Lazarus Auto Group on Long Island, which operates Saturn, Land Rover and Volvo stores.
The Los Angeles-based buyer, Marubeni Motor Service Inc., is a subsidiary of Marubeni America Corp. in New York. The Japanese parent, an Osaka-based trading company ranked by Fortune magazine as the world's sixth-largest company based on revenue, has close ties to Nissan Motor Co.
Marubeni also owns two Nissan dealerships in California.
Lazarus has three Saturn stores and a Saturn parts depot, plus property for a planned service-only point; three Land Rover Centres, with a fourth one under way; and Volvoville USA, which was Volvo's No. 2-selling U.S. dealership last year.
Revenue last year totaled $185 million from the sale of 5,500 new and 2,000 used cars and light trucks.
Michael Lazarus, co-owner with his brother, Bryan, said that Marubeni bought an 80 percent share of their Volvo and Land Rover dealerships, but that Saturn Corp. restricted Marubeni to 49 percent of the Saturn stores.
Based on the amount of cash paid, the deal appears to value Lazarus at about $70 million.
Marubeni plans to invest another $10 million in the next three years to expand the group, said Shigemi Naito, the newly appointed chairman of the Long Island Auto Group, the new name for the Lazarus organization.
Marubeni plans to acquire more U.S. dealerships, but not soon, said William Weld, a Marubeni America associate.
Saturn has been trying to keep a lid on acquisitions by publicly traded groups. New York-based United Auto Group owns one Saturn store, for instance, but Saturn forced the group to withhold the Saturn store from its initial public offering last fall.
Saturn spokesman Greg Martin said last week, 'We do not consider the sale of the (Lazarus) Saturn stores approved.' Michael Lazarus said that officially, the Saturn stores were 'restructured,' and that Marubeni had been brought in as an investor, with no management control.
The brothers have contracts to stay on and manage the company for a minimum of five years, Michael Lazarus said.