LMP trims size of N.Y. dealership group acquisition

LMP Automotive Holdings Inc. has trimmed the size of its planned acquisition of a stake in Atlantic Automotive Group of New York by more than half.

The publicly traded vehicle subscription and used-car retailer said Wednesday that it now plans to acquire a 70 percent stake in eight Atlantic dealerships representing nine import and domestic franchises, plus a storage facility. LMP said it would spend $191 million in cash and $40 million in LMP stock to finance the transaction, now expected to close in April pending closing conditions and automaker approvals.

The initial deal between LMP and Atlantic was announced in October and called for LMP to pay $425.6 million for a 70 percent stake in 17 dealerships representing 20 franchises, plus the storage facility. LMP said then that the acquisition would close this month.

LMP and Atlantic didn't disclose which dealerships were removed from the deal.

"We had to reduce that number due to certain geographic concentration issues that we were unable to get grandfathered," LMP COO Richard Aldahan told investors and analysts in a call Wednesday. "And the new mix is basically a miniature version of the old deal. So we still have certain franchises, all the prized franchises that were included in the original transaction."

LMP did not immediately respond to follow-up questions about the geographic concentration issues. Its stock was down more than 7 percent in trading late Wednesday.

The initial 17-store deal was to include Toyota, Lexus, Hyundai, Genesis, Chevrolet and Honda locations.

Not all of those brands are included in the restructured deal, Atlantic Automotive CFO Rob Dito told Automotive News, but he would not specify what was removed and what was left in the agreement. Chevrolet is Atlantic's only domestic brand.

As in the previous deal, LMP will lease the real estate, and Atlantic's owners and managers will continue to operate the dealerships, LMP said.

LMP said last week it expects to close this month on the purchase of eight other franchised dealerships in West Virginia, Florida and Tennessee, plus five used-vehicle stores in West Virginia, following a deal it made with Truist Bank to secure $192 million in financing.

In December, LMP and the seller of Newnan Toyota in Georgia agreed to terminate a July purchase agreement that called for LMP to buy a 75 percent stake in the store for $27 million. LMP did not disclose why that deal did not move forward.