The RFJ deal will add six new states to Sonic's footprint: Idaho, Indiana, Missouri, Montana, New Mexico and Washington. It also will add five new brands: Chrysler, Dodge, Jeep, Ram and Mazda.
"This one checked all the boxes with the familiarity with Rick Ford and with the additional locations and entrance into new markets and the strong emphasis that Rick's organization has on used cars," said Mike Sims, president of Pinnacle Mergers & Acquisitions in Frisco, Texas.
J.P. Morgan Securities analyst Rajat Gupta said the move fits well with Sonic's long-term strategy.
"The company has commented in the past that they were looking to do more deals and expand into other regions," Gupta said. "But we had expected smaller deals. In that context, it was a little surprising with the size of the deal. But [it] definitely shows that the company is willing to aggressively expand its franchise network, build a nationwide network and overlay their online platform which they're launching later this year."
Stephens Inc. analyst Rick Nelson described the acquisition as a "whopper of a deal" and the largest revenue generator to change hands in a number of years.
"Sonic was in debt reduction mode," Nelson said. "They had really strengthened the balance sheet. They were pursuing growth with EchoPark, but still had the balance sheet to absorb a business of this size. They want to grow franchised, they want to grow EchoPark, so I think it fit with what they were communicating to us."
Both Ford and Dyke happened to be in Las Vegas last week for a Toyota dealer meeting, allowing the longtime friends to pause and celebrate the deal in person at a hamburger joint.
"We looked at each other and said, 'No one in the world would believe that we're here at In-N-Out having a cheeseburger after doing a deal like this,' " Dyke recalled. "But that pretty much sums the two of us up: just a quick snack and getting back after it."
Melissa Burden contributed to this report.