Editor's note: A previous version of this story incorrectly stated how AutoCanada funded its acquisition of Mercedes-Benz Heritage Valley earlier this year. Funding came from a sale-leaseback transaction at two dealerships, not a sale.
AutoCanada Inc. has agreed to acquire Rose City Ford in Windsor, Ont., making it the first Blue Oval store to be owned by a publicly-held dealership group in Canada.
Rose City Ford, a 65,000-square-foot dealership that employs about 65 people and sells about 1,425 vehicles annually through fleet and retail, will also give AutoCanada its first Ford dealership in the country, a key for the company as it looks to expand its brand lineup and physical footprint.
“We are very excited to acquire our first Ford dealership, an acquisition that will advance our strategy of diversifying the brand and geographical mix in our portfolio of dealerships,” AutoCanada Executive Chairman Paul Antony said in a statement. “We would like to thank Rose City Ford and Ford of Canada for their confidence in AutoCanada, and we look forward to building a strong partnership with Ford.”
AutoCanada expects the deal to close in December. A Ford of Canada spokesman confirmed the automaker has signed a letter of intent with AutoCanada.
Ford of Canada in June said it would reverse its long-standing policy against publicly-traded companies owning its stores, about six months after General Motors Canada did the same. Toyota and Honda are among the major automakers that still prohibit publicly-traded companies from owning its stores.
John Chisholm, president of Rose City Ford, said it would be “business as usual” at the store as AutoCanada plans to keep the dealership’s employees on board. Chisholm said he and his wife, secretary-treasurer, Sophia Chisholm, would also remain with the dealership, though their precise roles are yet to be determined. He said he would remain the owner of the land and the building, and AutoCanada-owned Rose City will be a tenant.
“We have been approached over a number of years on a number of occasions, and it was never the right deal, to be truthful. When you’re selling a family-owned business that’s been around for almost 40 years, the deal really has to be right,” Chisholm told Automotive News Canada. “AutoCanada made an offer to purchase us, and we really liked the terms of the agreement and we agreed to sell.”
The acquisition is the latest in a series of deals in recent months made by AutoCanada, which has expanded its footprint in recent years to become less dependent on certain brands and markets in western Canada. The company owns 69 dealerships in eight provinces and in Illinois, selling 27 brands.
AutoCanada on Nov. 8 reported a net loss of $16.5 million in the third quarter, though the company appears to show no signs of slowing down its buying spree. In an earnings release, the company said it plans on growing, in part, through “through disciplined, accretive acquisitions that offer brand and geographical diversity.”
AutoCanada made waves earlier this year when it acquired nine stores in the Chicago area, including its first Toyota, Honda and Lincoln stores. Among other recent acquisitions, the company said in September that it would acquire Mercedes-Benz Heritage Valley in Edmonton, a purchase that it funded with a sale-leaseback transaction at its BMW Laval and Sherwood Park Volkswagen dealerships in Quebec and Alberta.
It has been a tumultuous year for the dealership group. Under pressure from investors worried about the company’s long-term financial health and about costs related to the Illinois deal, AutoCanada made a host of leadership changes earlier this year, including the departures of the company’s CEO, COO and CFO. Paul Antony, the former CEO of CarProof, was named executive chairman, while former Birchwood Automotive Group COO Michael Rawluk was named president. It also hired two former executives at AutoNation Inc., the largest dealership group in the United States, to run its American operations.