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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): March 16, 1998
GROUP 1 AUTOMOTIVE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-13461 76-0506313
(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification Number)
950 ECHO LANE, SUITE 350
HOUSTON, TEXAS 77024
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 467-6268
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On March 16, 1998, Group 1 Automotive, Inc. (the "Company") closed its
acquisition of two Ford dealerships in Florida and one Ford dealership in
Georgia, all of which were controlled by James S. Carroll. The consideration,
which was determined after an arms length negotiation between the Company and
James S. Carroll, for such dealerships consisted of approximately $17,806,000
and approximately 1,428,000 shares of Group 1 common stock, par value $.01 per
share (the "Common Stock"), plus additional consideration based upon the
performance, over the five-year period beginning January 1, 1999, of the
Group 1 dealerships for which Mr. Carroll is responsible. The maximum
additional consideration to be paid by the Company is $7.5 million ($2.5
million of which is guaranteed), payable in cash and Common Stock in the same
proportion as in the initial payment described above. If any of the former
stockholders sell in the public market any of the shares of Common Stock
received by such stockholders as part of the acquisition consideration between
March 16, 1999 (or in the case of Mr. Carroll, between March 16, 2000) and
March 19, 2003, Group 1 is obligated to pay such stockholders in cash the
amount, if any, by which the sale price of Common Stock received by such
stockholder in connection with such sale is less than $14. Approximately
seventy percent of the Common Stock issued in these acquisitions is not
permitted to be sold for a minimum of two years from the date of its issuance.
The remaining Common Stock issued in these acquisitions is not permitted to be
sold for a minimum of one year from the date of its issuance.
The cash portion of the purchase price was funded by cash flows from
operations.
In connection with these acquisitions, the former stockholders of the
acquired companies executed long-term employment agreements with the Company
that contain post-employment non-competition covenants. The real estate and
facilities comprising the acquired dealerships are leased from affiliates of the
former stockholders of the acquired companies under long-term leases with rental
rates that the Company believes approximate fair market rates.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements.
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Financial statements of the acquired dealerships have not been included
herein but will be included in a subsequent Current Report on Form 8-K to be
filed within 60 days after the date on which this Current Report on Form 8-K has
been filed.
Exhibit No. Description of Exhibit
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2.1 Agreement and Plan of Reorganization by and among Group 1
Automotive, Inc., Koons Merger, Inc., Koons Ford, Inc. and the
stockholders of Koons Ford, Inc. dated December 17, 1997
(incorporated by reference to Exhibit 10.39 of the Company's
Annual Report on Form 10-K for the year ended December 31,
1997).
2.2 Agreement and Plan of Reorganization by and among Group 1
Automotive, Inc., PF Merger, Inc., Perimeter Ford, Inc. and the
stockholders of Perimeter Ford, Inc. dated December 17, 1997
(incorporated by reference to Exhibit 10.40 of the Company's
Annual Report on Form 10-K for the year ended December 31,
1997).
2.3 Agreement and Plan of Reorganization by and among Group 1
Automotive, Inc., Courtesy Merger, Inc., Courtesy Ford, Inc. and
the stockholders of Courtesy Ford, Inc. dated December 17, 1997
(incorporated by reference to Exhibit 10.41 of the Company's
Annual Report on Form 10-K for the year ended December 31,
1997).
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: March 31, 1998
GROUP 1 AUTOMOTIVE, INC.
By: /s/ Scott L. Thompson
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Name: Scott L. Thompson
Title: Senior Vice President -- Chief
Financial Officer and Treasurer
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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2.1 Agreement and Plan of Reorganization by and among Group 1
Automotive, Inc., Koons Merger, Inc., Koons Ford, Inc. and the
stockholders of Koons Ford, Inc. dated December 17, 1997
(incorporated by reference to Exhibit 10.39 of the Company's
Annual Report on Form 10-K for the year ended December 31,
1997).
2.2 Agreement and Plan of Reorganization by and among Group 1
Automotive, Inc., PF Merger, Inc., Perimeter Ford, Inc. and the
stockholders of Perimeter Ford, Inc. dated December 17, 1997
(incorporated by reference to Exhibit 10.40 of the Company's
Annual Report on Form 10-K for the year ended December 31,
1997).
2.3 Agreement and Plan of Reorganization by and among Group 1
Automotive, Inc., Courtesy Merger, Inc., Courtesy Ford, Inc. and
the stockholders of Courtesy Ford, Inc. dated December 17, 1997
(incorporated by reference to Exhibit 10.41 of the Company's
Annual Report on Form 10-K for the year ended December 31,
1997).
