Sonic Automotive (SAH) to acquire RFJ Auto Partners –

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Sonic Automotive, Inc. (“Sonic Automotive” or “Sonic” or the “Company”) (NYSE:SAH), a Fortune 500 Company and one of the nation’s largest automotive retailers, today announced it has entered into a definitive agreement to acquire RFJ Auto Partners, Inc. (“RFJ Auto”). This acquisition represents one of the largest transactions in automotive retail history and is expected to propel Sonic Automotive into the top-five largest dealer groups in the U.S. as measured by total revenues.

With 33 locations in seven states and a portfolio of 16 automotive brands, RFJ Auto generated $2.8 billion in annual revenues in 2020, making it a top-15 U.S. dealer group by total revenues. The transaction will add six incremental states to Sonic’s geographic coverage and five additional brands to its portfolio, including the highest volume Chrysler Jeep Dodge RAM dealer in the world in Dave Smith Motors. In addition to further diversifying Sonic’s franchised dealership business, the transaction is expected to add $3.2 billion in annualized revenues, representing an incremental 30% increase in franchised dealership revenues above the Company’s previously stated target of $25 billion in total revenues by 2025.

“We are very excited to welcome the RFJ Auto team to the Sonic family as we continue to expand our nationwide network,” said David Smith, Chief Executive Officer of Sonic Automotive and EchoPark Automotive. “RFJ Auto’s management team – many of whom are former members of the Sonic family and have deep familiarity with our guest-centric mindset and innovative sales model – and the nearly 1,700 RFJ Auto teammates are an excellent fit with the culture and growth strategy of our franchised dealership business. As such, we anticipate seamless integration and expect to capture meaningful synergies from ‘day one,’ creating significant long-term value for our shareholders.”

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“This transaction is well-aligned with our strategy to grow our franchised dealership business by acquiring franchises that increase our geographic reach and expand our brand portfolio,” said Jeff Dyke, President of Sonic Automotive and EchoPark Automotive. “With my 20-plus year history with Rick Ford and much of his team, I very much respect and admire what a terrific job they have done growing and modernizing their business and see great synergies with the anticipated launch of our industry-leading digital omnichannel platform later this year. Beyond that, I am excited to once again work alongside Rick and his team as they remain in place to manage and accelerate our growth trajectory under this new partnership.”

Rick Ford, Chief Executive Officer of RFJ Auto, commented, “As a past member of the Sonic family, I know exactly how complementary our businesses are and I look forward to bringing together our shared commitment to guest satisfaction, innovative processes, and industry-leading technology for the benefit of all of our guests, teammates and stakeholders.”

Heath Byrd, Chief Financial Officer of Sonic Automotive and EchoPark Automotive, added, “Our focus on free cash flow generation and strengthening our balance sheet over the past few years has put us in the position to pursue strategic acquisitions like this while having the flexibility to allocate capital to our rapid EchoPark expansion plans, our dividend program and opportunistic share repurchases. After taking account of the expected financing of this transaction with debt and cash on hand, our pro forma credit facility leverage ratio will remain comfortably within our targets.”

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Sonic’s management team remains focused on executing the accelerated expansion plan for EchoPark’s nationwide distribution network. Based on success to-date and plans for future markets, EchoPark is on track to achieve 25% population coverage by the end of 2021, and 90% population coverage by 2025, bringing this unique and competitive offering to new markets to deliver value for guests. Additionally, as previously announced, Sonic’s Board of Directors continues to work with financial and legal advisors to consider a full range of potential strategic alternatives for its EchoPark business. No timetable has been established for the completion of the review, and the review may not result in any transaction. The Company does not intend to disclose further developments with respect to its review process unless and until its Board approves a specific action or otherwise concludes the review.

The RFJ Auto brand portfolio includes Chrysler, Jeep, Dodge, RAM, Chevrolet, GMC, Buick, Lexus, Toyota, Ford, Nissan, Hyundai, Honda, Mazda, Alfa Romeo, Maserati, and specialty pre-owned vehicle locations throughout the Pacific Northwest, Midwest and Southwest.

The RFJ Auto transaction is expected to close in December 2021. Lazard acted as financial advisor and Parker Poe acted as legal counsel to Sonic. RFJ Auto is a portfolio company of The Jordan Company, Cowen acted as the financial advisor and Greenberg Traurig acted as legal counsel.



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