EDMONTON, AB, April 14, 2021 /CNW/ - AutoCanada Inc.
("AutoCanada" or the "Company") (TSX: ACQ), a leading
multi-location North American automobile dealership group, is
pleased to announce that it intends to offer (the "Offering") an
additional $100 million aggregate
principal amount of its existing 8.75% senior unsecured notes due
2025 (the "Notes"). The Notes will be offered and sold to
"accredited investors" in certain provinces of Canada on a private placement basis.
Scotia Capital Inc., BMO Nesbitt Burns Inc., CIBC World
Markets Inc. and RBC Dominion Securities Inc. are acting as Joint
Bookrunning Managers, HSBC Securities (Canada) Inc. as Lead Manager, and along with
ATB Capital Markets Inc., Canaccord Genuity Corp., Cormark
Securities Inc., Stifel Nicolaus Canada Inc., Acumen Capital
Finance Partners Limited, and National Bank Financial Inc. who are
acting as Co-Managers for the Offering. Proceeds of the Offering
will be used by the Company to reduce the outstanding balance under
its syndicated credit facility and for general corporate purposes,
including acquisitions.
In addition, effective April 14,
2021, the Company has amended and extended its existing
credit facility for three years to 2024. The amended credit
facility increases the revolving facility by $50 million to $225
million and includes a $1,060
million wholesale floorplan financing facility and a
$15 million wholesale leasing
facility, for total aggregate bank facilities of $1.3 billion.
Mike Borys, Chief Financial
Officer of AutoCanada, stated, "The strength of our balance sheet,
our financial flexibility, our level of debt and our debt leverage
will allow us to move forward confidently on acquisitions. Together
with cash generated from strong earnings, as well as the
$50 million increase to our revolving
facility, the add-on offering will allow us to grow the business as
we move forward, while continuing to maintain strong discipline
over our balance sheet."
The Company continues to advance and actively assess strategic
acquisition opportunities and has developed a robust acquisition
pipeline while continuing to employ a disciplined hurdle-return
framework to price transactions. The Company is currently
engaged with multiple potential targets in connection with
potential acquisitions in excess of $100
million in transaction value. We are at varying stages
of the acquisition process with these targets, with the potential
deals remaining subject to due diligence, the entering into of
definitive agreements, OEM approvals and other standard conditions,
as applicable. Consistent with our previously stated
intentions and strategy, we expect these deals will add diversity
by geography and OEM brands. Most of this pipeline is represented
by franchise dealerships, most of which are located in Ontario, Canada, and the pipeline includes a
mix of OEM brands that we currently operate and brands that we do
not yet have. Used vehicle dealerships that would fall under our
Used Digital Retail Division platform and collision centres are
also included in our pipeline. We expect to finance these
potential transactions through a combination of debt and cash from
the balance sheet, while ensuring we maintain the Company's strong
balance sheet and financial flexibility. The Company anticipates
beginning to close on certain of these deals within the second
quarter of 2021, while also continuing to develop our acquisition
pipeline as we move forward beyond these initial acquisition
opportunities, although there can be no assurance that we will
complete all of these deals on the terms or on the schedule that we
currently anticipate, or at all.
Paul Antony, Executive Chairman
of the Company, added, "We are on track for another record quarter
as our team's relentless execution on daily actions and measures
positions us to sustain top-tier operating performance. The
strength of our operating platform and balance sheet has enabled us
to continue to develop organically as well as to focus on an
acquisition and innovation strategy. Given our strong business
position and available market opportunities, we see significant
opportunities to grow as an industry consolidator in both the
short-term and long-term."
Preliminary Unaudited First Quarter 2021 Operating
Results
Selected preliminary unaudited results for the three months
ended March 31, 2021 ("Q1 2021") are
highlighted below:
- Q1 2021 revenue of approximately $960 to $980
million, representing growth of approximately 36% over the
same period in 2020;
- Same store new retail unit sales growth of approximately 30% as
compared to the Canadian market increase of 15% for brands
represented by AutoCanada, as reported by DesRosiers Automotive
Consultants, reflecting an outperformance of the Canadian new
retail market by approximately 15 percentage points, and the
Company's 9th consecutive quarter of outperformance of
the Canadian new retail market;
- Same store used retail unit sales growth of approximately
43%;
- An increase in AutoCanada's same store used-to-new vehicles
sold ratio to approximately 1.19 in Q1 2021 from 1.10 in Q1 2020;
and
- Net debt of approximately $80
million as at March 31,
2021.
The Company has not yet completed its financial closing process
for Q1 2021, and the selected unaudited results provided above are
preliminary estimates. Actual results may differ materially from
these estimates due to the completion of the Company's financial
closing procedures, final adjustments, review by the Company's
auditors and other developments that may arise between now and the
time the financial results are finalized. These estimates are not a
comprehensive statement of the Company's financial results for Q1
2021 and should not be viewed as a substitute for full financial
statements prepared in accordance with International Financial
Reporting Standards, and these estimates are not necessarily
indicative of the results to be achieved for Q1 2021. The Company's
unaudited financial statements for Q1 2021 will not be available
until after the Offering is completed. The Company is issuing
preliminary results in order to enable it to disclose such
information in connection with the Offering, and the Company does
not intend to provide preliminary results in the future. The
preliminary results provided in this press release constitute
forward-looking statements within the meaning of applicable
securities laws, are based on a number of assumptions and are
subject to a number of risks and uncertainties. Please see the
section below entitled "Forward-Looking Statements". The
preliminary results have been prepared by, and are the
responsibility of, management of the Company. The Company's
independent registered public accounting firm,
PricewaterhouseCoopers LLP, has not reviewed the preliminary
results nor have they performed any procedures with respect to the
preliminary results. Neither PricewaterhouseCoopers LLP nor any
other independent accountants express an opinion or any other form
of assurance with respect to the preliminary results.
U.S. Leadership Team Update
AutoCanada also announces
that James Douvas has been appointed
Vice President of U.S. Operations, to drive accelerated performance
and expansion of the Company's U.S. business. James brings
over 20 years' experience in retail automotive in the Chicago area, with a track record of
transforming underperforming dealerships through significant
profit, volume, and customer satisfaction achievements that combine
cost control, revenue growth and process improvements.
About AutoCanada
AutoCanada is a leading North American multi-location automobile
dealership group currently operating 66 franchised dealerships,
comprised of 27 brands, in eight provinces in Canada as well as a group in Illinois, USA. AutoCanada currently sells
Chrysler, Dodge, Jeep, Ram, FIAT, Alfa Romeo, Chevrolet, GMC,
Buick, Cadillac, Ford, Infiniti,
Nissan, Hyundai, Subaru, Audi, Volkswagen, Kia, Mazda,
Mercedes-Benz, BMW, MINI, Volvo, Toyota, Lincoln, Honda and Porsche branded vehicles.
Additionally, the Company's Canadian operations segment currently
operates one used vehicle dealership supporting the Used Digital
Retail Division, and two stand-alone collision centres (within our
group of 17 collision centres). In 2020, our dealerships sold
approximately 66,000 vehicles and processed over 756,000 service
and collision repair orders in our 1,098 service bays generating
revenue in excess of $3 billion.
Forward Looking Statements
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 of 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", "shall" and
similar expressions) are not historical facts and are
forward-looking. In particular, this press release contains
forward-looking statements with respect to, among other things,
completion of the Offering, use of net proceeds of the Offering,
anticipated benefits of completing the Offering, the nature of the
Company's acquisition pipeline, potential acquisitions to be
completed by AutoCanada and the financing and timing thereof, and
AutoCanada's preliminary operating and financial results for Q1
2021.
The forward-looking statements included in this press release
are not guarantees of future performance and should not be unduly
relied upon. Readers are cautioned that forward-looking statements
are based on current expectations, estimates and projections that,
by their nature, involve a number of known and unknown risks and
uncertainties, which could cause actual results to differ
materially from those anticipated and described in the
forward-looking statements. These known and unknown risks and
uncertainties include, but are not limited to: potential changes in
the regulatory and legislative environment; political uncertainty
and instability in North America
and internationally; volatility in interest and tax rates;
operating risks inherent in the automotive retail industry; and
changes in general economic conditions including the capital and
credit markets.
Forward-looking statements may 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, these factors could cause actual results or
outcomes to differ materially from those expressed in the
forward-looking statements. In particular, in presenting its
forward-looking statements, AutoCanada has made assumptions
respecting, among other things: the relative stability of general
North American economic conditions; that AutoCanada will
successfully complete due diligence, negotiate definitive
agreements and satisfy all applicable closing conditions with
respect to its potential acquisitions; that AutoCanada will receive
the approvals needed to complete its potential acquisitions; and
regulatory and legislative conditions. Therefore, any such
forward-looking statements are qualified in their entirety by
reference to the factors discussed throughout this press
release.
AutoCanada cautions that the foregoing list of assumptions,
risks and uncertainties is not exhaustive.
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.
Additional Information
Additional information about AutoCanada is available at the
Company's website at www.autocan.ca and www.sedar.com.
SOURCE AutoCanada Inc.