ALBERTA

AutoCanada receives OK to buy Courtesy Chrysler car dealership in Calgary

05/13/2013 03:49 EDT | Updated 07/13/2013 05:12 EDT
EDMONTON - AutoCanada Inc. (TSX:ACQ) said Monday that it has received approval from Chrysler Canada to buy the Courtesy Chrysler dealership in Calgary.

Financial terms of the deal were not disclosed.

Courtesy Chrysler sells Chrysler, Dodge, Jeep and Ram cars and trucks in southeast Calgary and has three facilities including a body shop, 27 service bays and a 10-car showroom.

AutoCanada also announced a plan to raise $40 million in an offering of 1.6 million shares at $25 per share and see its largest shareholder, Canada One Auto Group Ltd., sell 2.5 million shares at the same price for a total of $62.5 million in a secondary offering.

The company and CAG have each granted the underwriters an over-allotment option for up to an additional 240,000 and 375,000 common shares respectively on the same terms and conditions.

AutoCanada said it will use the money raised for acquisitions and to pay debt under its revolving line of credit. It will not receive any of the secondary offering by CAG.

After the financing, but excluding the over-allotment options, CAG will own a 27.5 per cent fully diluted stake in AutoCanada. Assuming full exercise of the over-allotment options, CAG will hold 25.5 per cent.

AutoCanada has 30 franchised automobile dealerships in six provinces selling Chrysler, Dodge, Jeep, Ram, FIAT, Chevrolet, GMC, Buick, Infiniti, Nissan, Hyundai, Subaru, Mitsubishi, Audi, and Volkswagen vehicles.

Shares in the company were up $1.60 at $27.50 on the Toronto Stock Exchange before trading was halted pending the announcement.

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