Benzinga | Jan 13, 2021 07:03AM EST

LMP Automotive Holdings, Inc. Revises Atlantic Automotive Groups Acquisition Agreements to a Combination of Cash and LMPX Stock and Excludes Certain Dealerships in a Deal Valued at $330M

LMP Automotive Holdings, Inc. (NASDAQ:LMPX) (the "Company" or "LMP"), an e-commerce and facilities-based platform for consumers who desire to buy, sell, subscribe to or finance pre-owned and new automobiles, today announced it has revised its agreements to acquire Atlantic Automotive Group ("AAG") to a combination of cash and LMPX common stock and to exclude certain dealerships owned by AAG in a deal valued at $330 million.

* Acquisition agreements include revised transaction terms from the transaction previously announced on October 9, 2020

* Includes Atlantic Central Storage, eight dealership locations consisting of nine import and domestic franchise brands along with several management companies that generated approximately $655 million revenue and $25.1 million in net income in calendar year 2020

* Real estate leased with an option to purchase owned properties

* LMP's 70% partnership interest purchase is comprised of $40 million in LMPX common stock with a floor of $57 per share and $191 million in cash

* Acquisition is inclusive of approximately $34.7 million of working capital and FF&E and is expected to be immediately accretive to cash flow and earnings upon close, adding $15 million in annualized net income or $1.35 per share in 2021 and 16.9 million in net income or $1.52 per share in full year 2022 based on an estimated 11.1 million shares to be outstanding after closing. We expect to close the transaction in April of this year

* Adds approximately 610 employees to LMP's partnership portfolio companies

* Atlantic Automotive Group's ownership and management will continue to operate the business post-closing

* Upon closing and combined with our previously contracted stage 1 acquisitions which are expected to close this month, LMP's revenues are expected to exceed $1.3 billion, with approximately $36 million in net income or $3.24 per share in 2021 on an annualized basis and $1.4 billion, with approximately $39 million in net income or $3.51 per share in 2022 inclusive of synergies and adds over 1,100 employees in our partnership portfolio companies

Sam Tawfik, LMP's Chief Executive Officer stated, "On behalf of myself, LMP and our Board of Directors, I want to welcome and thank the Atlantic team on our prospective partnership. Atlantic has been recognized in the past as a top 8 dealership group in the U.S. as measured by revenue and is a leader in automotive retail. We are all looking forward to working together and expanding upon Atlantic's previous success. We expect to close our previously-announced stage 1 acquisitions this month, and the Atlantic acquisition by April, subject to customary closing conditions and manufacturer approval."

Richard Aldahan, LMP's Chief Operating Officer added, "This restructured partnership combined with our stage 1 deals in contract brings our total contracted new vehicle franchise count to 21, operating at 15 locations, and our pre-owned dealership count to 5 locations with vehicle unit sales of roughly 39,500 in 2020 with a 52% new to used mix along with additional vehicle storage capacity of over 5,000 vehicles between the Northeast and Southeastern United States. This is an important addition to our network given Atlantic's dominant and clustered presence in New York, one of the most lucrative markets in the United States. Atlantic's vehicle fulfillment, reconditioning and service capacity will cost-effectively expand our free delivery radius and cut out multiple legs of costly transportation, logistics and reconditioning costs. We look forward to working with our future teammates at Atlantic," Mr. Aldahan concluded.

Evan Bernstein, LMP's Chief Financial Officer commented, " The Atlantic partnership is expected to add an estimated $655 million in revenue, $15 million in net income on an annualized basis in 2021 or $1.35 per share and 16.9 million in net income or $1.52 per share in full year 2022 inclusive of synergies and based on an estimated 11.1 million shares to be outstanding after closing. Under our previously signed agreement with a purchase price of $397.6 million for LMP's 70% partnership interest which we terminated, we had expected to be accretive to earnings in an amount equal to $3.18 per share and net income of $38 million on an annualized basis. With Atlantic's newly structured deal, combined with our currently contracted acquisitions which we expect to close this month, we anticipate combined expected revenues to exceed $1.3 billion, with approximately $36 million in net income or $3.24 per share in 2021 on an annualized basis and $1.4 billion, with approximately $39 million in net income or $3.51 per share in 2022 inclusive of synergies." Mr. Bernstein added, "We are seeing a robust acquisition market as we continue to build our pipeline of prospective dealership partnerships and intend on accelerating our acquisition strategy moving forward in our targeted regions, as well as recruiting additional management and promoting within our portfolio companies." Mr. Bernstein concluded.