Editor's note: The original version of this story cited an erroneous revenue forecast.
A former telecom executive who in December took a fledgling vehicle subscription and used-vehicle business public now aims to roll up dozens of franchised dealerships to establish that company as a new player among public auto retailers.
In the last eight weeks, Samer Tawfik's company, LMP Automotive Holdings Inc., has announced deals to buy all or part of nine franchised dealerships and three used-vehicle stores in four Southern states for a total of about $120 million. Tawfik said LMP could have as many as 50 dealerships in its portfolio or under contract within a year.
"We are trying to be the most aggressive acquirer that the industry has seen," Tawfik, LMP's CEO, told Automotive News.
It's an ambitious plan and one Tawfik said will require turning to the capital markets to borrow money for at least the initial deals. LMP had $17.7 million in cash on hand at the end of June and posted its first quarterly profit — a modest $216,102 — in the second quarter. The just-announced deals would give LMP an estimated additional $645 million in revenue and $16.4 million in net income next year, the company said last week.
But how will Tawfik and LMP — unknown to many in the industry — get it done?
Some buy-sell experts and auto retail analysts are skeptical, noting that LMP's plan requires automaker approvals and hundreds of millions of dollars or more to pull off. Buying 50 stores in a year may be too ambitious, said Sheldon Sandler, CEO of Bel Air Partners, a buy-sell advisory firm in Hopewell, N.J.
"Whoever is running this company is taking lessons from Elon Musk. That is a record that has never been achieved by anybody, period," said Sandler, a former Securities and Exchange Commission chief examiner who helped guide heavy-truck dealer Rush Enterprises to an initial public offering in the mid-1990s.