Sonic Automotive is set to purchase almost all of the Don Massey dealerships, the 19th largest dealer group in the U.S. The 16 dealerships, including 13 Cadillac shops, have an estimated annual revenue of $1 billion.

"This acquisition continues the execution of our strategy to overweight our representation of luxury brands; in this case, Cadillac," said Sonic chairman and CEO O. Bruton Smith.

"Cadillac has an outstanding product plan and management team, with a solid future as General Motors' principal luxury car brand. Cadillac has announced plans to introduce five brand new products in the next 18 months. New leadership has reinvigorated Cadillac and General Motors, and we're pleased to become a bigger part of General Motors' dealer network."

Smith added that Sonic was raising its 2002 earnings per share target from $2.38 to $2.45. In addition, in 2003, it is expected that the Massey group acquisition should increase earnings per share by $0.30 to $0.40. The acquisition is subject to conditions, including manufacturers' approval, and is expected to close in the second quarter of 2002. Payment will be in cash and 1,470,588 shares of Sonic Automotive, Inc. Class A Common Stock.

"Sonic has exceeded our previously stated acquisition target for the first three quarters of 2002 to announce the acquisition of dealerships representing at least $800 million in annual revenue. We expect our acquisition pace to slow over the next several quarters as we integrate the Massey dealerships," Smith said. "However, we do expect to continue acquisition activity with a focus on markets with existing operations and an established management team."

It's the biggest sale ever for Don Massey, the 73-year-old king of Cadillac retailing, after more than 50 years in the auto business. Massey, the nation's largest Cadillac dealer, confirmed on Jan. 15 that he will sell his Plymouth, Mich.-based 16-dealership group to publicly traded Sonic Automotive Inc. for an undisclosed amount of cash and 1.47 million shares of Sonic stock -- worth close to $40 million. Massey's chain has annual revenue of about $1 billion and sold more than 10,000 Cadillacs last year.

Following the completion of the acquisitions, Cadillac is expected to represent approximately 12 percent of Sonic's brand portfolio while General Motors' brands will account for approximately 20 percent. The acquisition also includes 13 collision repair centers, which increases the number Sonic owns by 45 percent.