EDMONTON, Sept. 25, 2018 /CNW/ -AutoCanada Inc. ("AutoCanada" or the "Company") (TSX: ACQ), a multi-location North American automobile dealership group, announced today that it has entered into an agreement to sell two of its dealership properties to Automotive Properties Real Estate Investment Trust for a total purchase price of $55.5 million, with the properties being leased back to the AutoCanada dealerships.
The two dealership properties included in the sale-leaseback transaction are the BMW Laval dealership property located in Laval, Québec, and the Sherwood Park Volkswagen dealership property located in Sherwood Park, Alberta.
"This sale-leaseback transaction unlocks the underlying value in these two properties and provides us with financial flexibility by improving the ratios under our credit facility. We intend to use the net proceeds of the transaction to fund our previously announced acquisition of Mercedes-Benz Heritage Valley, which is expected to close on October 1, 2018, and to repay the existing mortgages on the properties" said Paul Antony, Executive Chairman of AutoCanada.
Upon closing of the transaction, BMW Laval and Sherwood Park Volkswagen will enter into 18-year, triple-net leases with Automotive Properties REIT. The leases will include annual rent increases after the third year of the term that will be based on the Consumer Price Index. The transaction is expected to close later this month, subject to customary closing conditions.
AutoCanada, a leading North American multi-location automobile dealership group currently operating 68 franchised dealerships, comprised of 27 brands, in eight provinces in Canada as well as a group in Illinois, USA and has over 4,200 employees. AutoCanada currently sells Chrysler, Dodge, Jeep, Ram, FIAT, Alfa Romeo, Chevrolet, GMC, Buick, Cadillac, Infiniti, Nissan, Hyundai, Subaru, Mitsubishi, Audi, Volkswagen, Kia, Mazda, Mercedes-Benz, Smart, BMW, MINI, Volvo, Toyota, Lincoln and Honda branded vehicles. In 2017, our dealerships sold approximately 63,000 vehicles and processed approximately 870,000 service and collision repair orders in our 999 service bays generating revenue in excess of C$3 billion.
Certain statements contained in this press release are forward‑looking statements and information (collectively "forward‑looking statements"), within the meaning of the applicable Canadian securities legislation. We hereby provide cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in these forward‑looking statements. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "will likely result", "are expected to", "will continue", "is anticipated", "projection", "vision", "goals", "objective", "target", "schedules", "outlook", "anticipate", "expect", "estimate", "could", "should", "plan", "seek", "may", "intend", "likely", "will", "believe" and similar expressions) are not historical facts and are forward‑looking. Forward looking statements in this press release include, but are not limited to, statements regarding the closing of the sale-leaseback transaction and the closing of the acquisition of Mercedes-Benz Heritage Valley. Forward-looking statements involve estimates and assumptions and are subject to risks, uncertainties and other factors some of which are beyond our control and difficult to predict. Accordingly, actual results or outcomes may differ materially from those expressed in the forward‑looking statements. Therefore, any such forward‑looking statements are qualified in their entirety by reference to the factors discussed throughout this press release. The Company's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website at www.sedar.com) describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference.
Further, any forward‑looking statement speaks only as of the date on which such statement is made, and, except as required by applicable law, we undertake no obligation to update any forward‑looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward‑looking statement.