Five TX Vehicle Dealerships Part of Sonic's Hub-and-Spoke Acquisition Strategy

DALLAS-Sonic Automotive Inc., based in North Carolina, is seeking to buy five dealerships in Texas, with a 1999 combined revenue of $458 million. The dealerships are Garry McKinney Toyota in Ft. Worth, Baillargeon Ford and Nils Sefeldt Volvo, both in Dallas, and Philpott Ford and Philpott Toyota, both in Beaumont.

The acquisitions, when completed, will give Sonic about $496 million in 1999 revenues in the Dallas-Ft. Worth area and about $663 million in the South TX-Houston area. The buyouts are expected to close in fourth quarter 2000 or early 2001.

The acquisitions are part of a “hub-and-spoke” strategy that Sonic has undertaken, says O. Bruton Smith, Sonic CEO and chairman. To date this year, Sonic has bought 14 dealerships totaling about $1.1 billion in annual revenues.

Sonic is the second-largest automotive retailer in the US. Including pending acquisitions, it operates 174 franchises and 32 collision repair centers. Sonic had revenues of $3.4 billion in 1999, an increase of 109% over 1998. The revenue run rate is estimated at more than $6 billion for 2000.