LMP Automotive Holdings Inc. said the seller in a proposed transaction in which it was to buy five import dealerships in Texas will keep a $1.5 million deposit per terms of the contract, which was terminated this week.
The Fort Lauderdale, Fla., publicly traded company said in a Thursday regulatory filing that its asset purchase agreement to buy dealerships from Steve McGavock was terminated Monday. In a news release, LMP CEO Samer Tawfik said the termination happened "due to the expiration of the closing date deadline."
In September, LMP announced the planned acquisition of four Nissan dealerships in Abilene, Amarillo, San Marcos and Lubbock and an Infiniti store in Lubbock from McGavock, principal of McGavock Auto Group. The deal also included real estate.
LMP said then that the transaction, predicted to generate about $592 million in annual revenue, was slated to close in the fourth quarter.
The company in a September news release said it would pay about $62.5 million in goodwill for the dealerships and $55 million for real estate. It said it would pay for that acquisition through cash and debt, with up to $6.25 million paid for in common stock. But a regulatory filing that month, which included a copy of the agreement, pegged the purchase price at $61.5 million, of which up to $10 million could be paid for with 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.
It's the latest terminated acquisition for LMP, which early last year closed on its first franchised dealership acquisitions and entered into numerous contracts to buy dealerships. It has just more than a half-dozen rooftops in its portfolio.
In a January regulatory filing, LMP said its planned acquisition of a Hyundai dealership in West Virginia also was terminated, on Dec. 31, according to terms in its purchase agreement. LMP in that filing said "the company did not incur any material termination penalties pursuant to such termination."
Through the first three quarters of 2021, LMP generated $1.1 million in net income, including $4.77 million in the third quarter. As of Sept. 30, LMP had $18.8 million in cash, though it noted more than $10.8 million in cash was restricted.
The company, which has aspirations to roll up dozens of dealerships, has announced seven other acquisitions that it had said were slated to close in the fourth quarter. In a Thursday news release, LMP's Tawfik said the company expects beginning in February to "close substantially all the remaining seven acquisitions under contract in 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 news release that LMP had "engaged Bank of America" to help it refinance debt.
Tawfik, in this week's statement, said his company is continuing to work with "prospective lenders to provide the necessary debt financing to consummate these acquisitions."
Separately this week, LMP said it would pay $29 million as part of an agreement to buy property in Elmsford, N.Y., to relocate and expand its White Plains Chrysler-Dodge-Jeep-Ram dealership in New York. It acquired an 85 percent stake in that dealership in October. The company said the property acquisition is expected to close in the second quarter, and it expects to be operating from the site by the fourth quarter.
"This is a trophy property located in one of the best and highest trafficked areas in Westchester County," LMP COO Richard Aldahan said in a statement. "The property provides for a significant modernized expansion to service bays, showroom and added parking for hundreds of additional vehicles."
