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Prime Automotive Group Puts Dealerships Up for Sale

The entire Prime Automotive Group portfolio will be sold as a platform, hoping to close a transaction by year’s end.

August 26, 2021
Prime Automotive Group Puts Dealerships Up for Sale

GPB Capital Holdings offices in Clearwater, Florida.

Credit:

Tampa Bay Times/Zuma Press

2 min to read


Prime Automotive sold 14 dealerships in 2020, leaving its current store count at 31. Now The GPB Automotive Portfolio limited partnership, the partnership that owns most of the company’s assets, plans to sell the entire Prime Automotive Group portfolio, hoping to close a transaction by year’s end.

Prime Automotive of Westwood, Mass., which also operates three collision centers in the Northeast, is one of the largest dealership groups in the country. Automotive News ranks the company at No. 18 on its list of top 150 dealership groups based in the U.S. The company had retail sales of 31,529 new vehicles in 2020.

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Automotive News recently reported that an anonymous source at a Northeast dealership said the business submitted a bid in June to Jefferies Financial Group to buy some Prime stores. The company turned down the offer because the group would only consider proposals to buy the entire Prime portfolio.

The holding company that owns most Prime assets has also questioned whether they could continue to move forward with its plans, according to an article in Automotive News in June. An expiring credit agreement for vehicle floor planning, mortgages and other debt led by M&T Bank Corp. were cited as the reasons for their concern.

A May 14 regulatory filing with the U.S. Securities and Exchange Commission (SEC) also uncovered that some automakers had sent franchise termination notices or had threatened to terminate dealer agreements. The filing also revealed that the holding company was exploring options for Prime Automotive’s future, including “co-investments, a spin-off of businesses, a public listing or merger or a sale of individual dealerships or groups of dealerships.”

The bank extended the expiring credit agreement to December 2022, according to a July filing with the SEC. The GPB Automotive Portfolio limited partnership reported in June that it had amended its credit agreement with M&T Bank easing ongoing financial concerns that the company could continue. The agreement also freed up money controlled by Prime to help the partnership meet its obligations.

“Based on these amended terms, and the improved liquidity they provide the partnership, we believe we will have sufficient liquidity to meet our financial obligations for the period of at least 12 months from July 21, 2021 (management’s assessment date),” the July filing said.

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The Prime group includes a mix of luxury, import and domestic stores. The partnership in 2020 reported annual revenue of nearly $2.4 billion, down 19% from 2019.

Several public new-vehicle retailers, as well as some large private dealership groups, may have the necessary capital and automaker relationships to purchase and get manufacturer approvals to buy Prime. 

Originally posted on Auto Dealer Today

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