Sonic Automotive Inc. said it agreed to acquire RFJ Auto Partners Holdings Inc., one of the largest privately owned dealership groups in the U.S., in the latest auto retail megadeal.
Sonic on Wednesday said the $700 million purchase of RFJ Auto's portfolio of 33 franchised and used-vehicle dealerships in seven states and real estate is expected to add $3.2 billion in annual revenue.
Sonic said the platform of stores last year generated $2.8 billion in annual revenue.
The deal is expected to close in December. Sonic shares rose 2.3 percent to close at $55.01 in New York.
"RFJ Auto's management team — many of whom are former members of the Sonic family and have deep familiarity with our guest-centric mindset and innovative sales model — and the nearly 1,700 RFJ Auto teammates are an excellent fit with the culture and growth strategy of our franchised dealership business," Sonic CEO David Smith said in a statement.
RFJ Auto, based in Plano, Texas, formed in February 2014 when automotive retail veteran Rick Ford partnered with Jordan Co., a New York private equity firm. RFJ's dealership footprint is largely in Texas and the Northwest, but it also has a presence in Indiana, Missouri and New Mexico.
RFJ Auto's brand portfolio is made up of Alfa Romeo, Chrysler, Dodge, Jeep, Ram, Chevrolet, GMC, Buick, Lexus, Toyota, Ford, Nissan, Hyundai, Honda and Mazda. RFJ Auto also has a group of used-vehicle-only stores across several states.
Sonic said the deal will add six new states to its footprint: Idaho, Indiana, Missouri, Montana, New Mexico and Washington. It will also add five new brands to its portfolio: Chrysler, Dodge, Jeep, Ram and Mazda.
RFJ Auto ranked No. 42 on Automotive News' most recent list of the top 150 dealership groups based in the U.S., with retail sales of 19,705 new vehicles and 28,448 used vehicles in 2020. The Automotive News list is ranked by new-vehicle sales. Sonic noted in its announcement that RFJ is in the top 15 of U.S. dealership groups when ranked by total revenue.