LMP Automotive Holdings Inc. is planning to terminate its seven pending purchases of numerous auto dealerships and is considering a sale of the company.
“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.
The small, publicly traded auto retailer, in a news release on Wednesday, said its board of directors feels its stock price is undervalued. Shares of LMP closed at $6.65 on Tuesday. A year ago, the shares were trading for more than $20.
Stock had been part of LMP’s strategy to help pay for at least 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.
This week, Automotive News reported that a seller in one planned deal kept a $1.5 million deposit after that deal fell through on Jan. 31. It marked the latest transaction to collapse for the Fort Lauderdale, Fla., company.
Last year, LMP acquired its first franchised dealerships and entered into several contracts to buy additional dealerships. In 2020, the then-used-vehicle and vehicle subscription retailer announced aspirations to roll up dozens of dealerships. It has eight franchised dealerships and four used-vehicle stores in its portfolio.
This month, LMP said it expected in February that it would begin to close “substantially all” its pending deals.
Those contracts, some of which date back to March 2021, include buying:
- An 85 percent 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
- An 85 percent stake in 10 new-vehicle dealerships in Florida, a used-car center and a fleet operations outlet from the Alan Jay Automotive Network
In late December, Tawfik said in a news release that LMP had “engaged Bank of America” to help it refinance debt, and this month he said in another release that LMP was working with “prospective lenders to provide the necessary debt financing to consummate these acquisitions.”
