Startup LMP Automotive Holdings makes play for large New York dealer group
October 13, 2020
FORT LAUDERDALE, Fla. –
Within a month of announcing plans to roll out an app to take advantage of consumers’ growing interest in vehicle subscriptions among other online activities, LMP Automotive Holdings made another significant move to get deeper into the dealership world.
On Monday, the e-commerce and facilities-based platform for consumers who desire to buy, sell, subscribe for or finance used and new vehicles announced plans to acquire a 70% interest in New York’s largest franchise dealership group, Atlantic Automotive Group, as well as logistics and vehicle storage company, Atlantic Central Storage.
The proposed deal is valued at $608 million.
The move for the New York dealerships also came after LMP Automotive Holdings announced plans to acquire an 85% interest in five new-vehicle franchises and three pre-owned centers in West Virginia as well as a 100% interest in four new-vehicle franchises in Tennessee.
Should the deals come to fruition, the company portfolio would include 33 franchises. Here is a brand breakdown according to company news releases:
And the company seems to be far from finished as LMP said it plans on adding 30 to 40 dealerships in 2021.
“We are seeing a robust acquisition market as we continue to build our pipeline of prospective dealership acquisitions and intend on accelerating our acquisition strategy moving forward in our targeted regions, as well as recruiting adding additional management and promoting within our portfolio companies,” LMP chief financial officer Evan Bernstein said in one of those news releases.
On the fintech front, last month LMP also launched its interactive e-commerce website with similar functionality as its app that’s available in the Apple App and Google Play Stores.
The company said it is currently developing software logic and algorithms for the integration of F&I, service contracts and automated document management that LMP expects to increase margins in addition to gross and net profits per sale significantly. Management anticipates releasing these updates to its app and website in the fourth quarter of this year and first quarter of 2021.
LMP also intends to simultaneously integrate the vehicle inventory of its contracted acquisitions. LMP expects this combination will enhance its customer experience, lower SG&A per transaction. as well as significantly expand its lmpmotors.com online store.
“We see the immense opportunity that exists within our industry that we are exploiting through continued focused growth and the activation of our e-commerce sales, subscription and dealership acquisition strategy,” LMP chairman and chief executive officer Sam Tawfik said. “We are seeing a robust acquisition market as we continue to build our pipeline of prospective dealership acquisitions and intend on accelerating our acquisition strategy moving forward.
“Looking forward, we are as optimistic as ever and focused on our next-generation of innovation and growth as we roll-out e-commerce home delivery, site-to-store and ship-from-store delivery strategies for our customers and demonstrate the value of our e-commerce hybrid model at the growing list of auto dealerships we intend to acquire,” Tawfik continued.
“At LMP, we intend to demonstrate rapid, efficient and profitable expansion in this online-centric economy. LMP is focused on acquiring dealer groups to create concentrated clusters of dealerships to derive maximum SG&A efficiency while expanding consumer product and delivery optionality,” he added. “At the same time, we plan on maintaining each dealership’s local brand recognition and online presence while simultaneously aggregating the dealership’s new and used inventory on lmpmotors.com.
“By leveraging our access to acquired dealership inventories, we can create one of the largest and most diverse online stores, providing consumers multiple vehicle access and ownership options. We plan to grow revenues and earnings of dealerships that we acquire by adding e-commerce and subscription options for their customers as well as ‘tech’ enabling them. We believe this combined approach will produce continued revenue and earnings growth for us and our shareholders,” Tawfik went on to say.