Five LV auto dealers sold to Republic

Thursday, Sept. 3, 1998 | 11:35 a.m.

Today's $187 million acquisition of a Texas auto dealership chain by Republic Industries Inc. includes five Southern Nevada dealerships.

Republic already owns the AutoNation USA used car dealership in Henderson. The Fort Lauderdale, Fla.-based Republic also owns the Desert Automotive Group, a Buick outlet, and is expected to close soon on the acquisition of Willden's Pride Dodge of Las Vegas.

Republic also controls Silver State Disposal Service Inc. in Southern Nevada.

Under a deal announced today, it will add Toyota West, Nissan West, Chaisson Motor Cars, Chaisson in the Valley Auto Mall and Las Vegas Honda to its Southern Nevada properties when it buys Cross-Continent Auto Retailers Inc.

The five dealerships being acquired in the Cross-Continent deal announced today had 1997 sales of $295 million.

Jim Donahue, vice president of corporate communications for Republic, said that despite the size of the deal in Las Vegas, Republic does not expect any problems with the transaction complying with federal antitrust laws.

"We would not do a deal that would have any possibility of running afoul of government regulations," Donahue said. "We've done our homework on this."

Donahue said in addition to government regulations, manufacturers have limitations on the number of dealerships under control by one group and the transaction has the blessings of those companies. He said the government has no set formula for the determining antitrust problems and that the Justice Department reviews each transaction on its own merits.

John Gaines, chief financial officer for Cross-Continent, said Republic's offer was too good to pass up for shareholders.

Republic said it will pay $10.70 a share for Amarillo, Texas-based Cross-Continent, 66 percent more than Wednesday's close of 6 7/16, and assume $42 million in debt. The purchase will add dealerships in Texas, Oklahoma and Colorado as well as Nevada that had revenue last year $472.1 million. Republic had revenue of $10.3 billion last year.

Republic, which began buying new-car dealerships in December 1996, wants to consolidate the fragmented auto retailing industry, allowing it to slash advertising and other costs to boost dealership profits. With a similar goal, Cross-Continent became the first publicly traded new-car dealership company when it raised $51.5 million in an initial offering in September 1996.

"This was the best fit of the public companies for us," said Steven Berrard, Republic's president and co-chief executive officer. "Cross-Continent is a premier auto retailer with excellent franchises primarily in markets where we have a presence or were contemplating entering."

BLOOMBERG BUSINESS NEWS contributed to this report.