MENU
SEARCHLMP Automotive Holdings Inc. plans to terminate seven pending purchases of many auto dealerships due to an inability to secure financial commitments.
LMP Automotive Holdings Inc. plans to terminate seven pending purchases of many auto dealerships due to an inability to secure financial commitments.
IMAGE: LMP
LMP Automotive Holdings Inc. plans to terminate seven pending purchases of many auto dealerships due to an inability to secure financial commitments.
"The company intends to terminate all of its pending acquisitions in accordance with the terms of their respective acquisition agreements, primarily due to the inability to secure financial commitments and close within the time frames set forth in such agreements," LMP CEO Samer Tawfik said in a statement.
LMP reported in a news release that its board of directors believes its stock price is undervalued. LMP shares closed at $6.65 on Feb. 15 and plunged 21%to $5.25 when the market closed Wednesday.
A year ago, LMP shares traded for over $20.
The stock was part of LMP's strategy to offset the cost of some of its pending acquisitions.
"Given the record M&A activity in our sector and multiples being paid for these transactions, LMP's board of directors has directed management to immediately pursue strategic alternatives, including a potential sale of the company," Tawfik said in the statement.
Automotive News has reported that a seller in one planned deal kept a $1.5 million deposit after that deal fell through on Jan. 31.
In 2021, LMP acquired its first franchised dealerships. The company also entered several contracts to buy more. LMP never had the capital base to pursue acquisitions as aggressively as they were, said Sheldon Sandler, CEO of Bel Air Partners, a buy-sell advisory firm in Hopewell, N.J.
Sandler notes companies should demonstrate to investors that they’re growing but must make sure they have the necessary capital to support that growth.
“LMP never had access to the capital to sustain their growth,” he said. “Their cash flow was inadequate to cover the cost of their growth.”
The affected pending purchases include:
85% stake in Central Avenue Chrysler-Jeep-Dodge-Ram in Yonkers, N.Y.
Tom Peacock Cadillac and Tom Peacock Nissan in Houston
Kia of East Hartford in Connecticut
Zappone Chrysler-Jeep-Dodge-Ram in Clifton Park, N.Y.
Chantz Scott Chrysler-Dodge-Jeep-Ram in Greeneville, Tenn.
Yonkers Kia in New York
85% stake in 10 new-vehicle dealerships in Florida, a used-car center and a fleet operations outlet from the Alan Jay Automotive Network
Originally posted on Auto Dealer Today
Conversion rates were flat last week at 63%, Black Book analysts calculated, as low-mileage and almost-near units outpaced the overall market.
Read More →
Trade relations between the European Union and the U.S. are at risk, causing the European Automobile Manufacturers Association to push lawmakers to make a decision.
Read More →
Understanding the risks and benefits of retail accounting and Super CFCs can help you better present options to your dealer partners.
Read More →
China easily reigns in the segment, but European countries’ adoption rates are growing. The U.S., probably due to market size, has the second biggest EV fleet.
Read More →
The full-size pickup segment, which has been dominant in the U.S., ended 11 consecutive weeks of gains with a slight dip last week.
Read More →
Wholesale auto conversion rates dropped slightly as auction buyers proved picky last week, analysts observed.
Read More →
Fast charging of electric vehicles provides a solution for range anxiety, but it also poses a risk to battery cycle life due to increased temperatures, according to an EV supply chain data provider.
Read More →
Expanding Midwest automotive group picks up three stores as part of the robust transaction activity early this year.
Read More →
Cox Automotive data shows Americans doubled down on big-is-better despite price increases. Slightly higher incentives helped fuel the demand.
Read More →
The automaker says its movement of some electric-vehicle work to the S.C. factory is part of a more tailored product focus. It also plans to add a new hybrid model to the plant’s itinerary.
Read More →