Skip to main contentThe Asbury Automotive Group has learned something many Portlanders already knew--Scott Thomason is one hell of a salesman.
Asbury bought Thomason's car dealerships in two transactions in 1998 and 1999, as part of a strategy that involved acquiring nine big dealerships in the country.
Until last week, when Asbury, which is controlled by two investment firms, Ripplewood Holdings and Freeman Spogli & Co. sold stock to the public for the first time, the details of the Thomason transactions remained secret. According to Asbury's SEC filings, however, Thomason sold a 51-percent stake in his dealerships for a total of $68 million in cash.
In addition to minority ownership, Thomason retained the ground beneath his lots and buildings, which earns him more than $1 million a year in rent.
When the transactions were completed, SEC filings suggest Thomason's car business enjoyed annual revenues of around $570 million and profits of about $8 million, which means Asbury paid roughly 17 times earnings.
Last week's initial public offering, however, valued the entire Asbury group, which had 2001 profits of
$44 million, at $560 million, a price-to-earnings ratio of only 12.7.
That means Asbury placed a substantially higher value on Thomason's businesses than was received from the investing public.
To his credit, Thomason declined to crow about selling his dealerships at the highs of the market. "I'd rather not get into that," he told WW.
The SEC filings also contain details about Thomason's regulatory difficulties (see "Car King," WW, Feb. 9, 2000). Thomason gave cash and stock worth $6.8 million back to Asbury to cover the cost of settling complaints about "certain business practices" and "certain employment practices," which included deceptive sales techniques and discrimination against some employees.
Thomason retains a significant stake in Asbury, which he says he must hold for two years. "I'm glad
we did it," he says of the IPO. "I had hoped to do it a year or two earlier."
The filings hold one other bit of news. In 2001, the biggest year ever for new car sales nationwide, sales at Thomason lots were down 18.9 percent--a trend Thomason blames on the Northwest's poor economy.
WWeek 2015