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): DECEMBER 10, 1999
SONIC AUTOMOTIVE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-13395 56-201079
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
5401 E. INDEPENDENCE BOULEVARD
CHARLOTTE, NORTH CAROLINA 28212
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (704) 532-3320
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 10, 1999, Sonic Automotive, Inc. acquired (i) approximately
96% of the outstanding shares of Class A Common Stock of FirstAmerica
Automotive, Inc. ("FirstAmerica"), (ii) all of the outstanding shares of Class B
Common Stock of FirstAmerica, (iii) all of the outstanding shares of Preferred
Stock of FirstAmerica, and (iv) approximately 94% of the outstanding warrants to
purchase shares of Common Stock of FirstAmerica (the "FirstAmerica
Acquisition"). The FirstAmerica Acquisition was effected pursuant to the terms
of an Agreement and Plan of Merger and Reorganization dated as of October 31,
1999 (the "Reorganization Agreement") by and among Sonic, FAA Acquisition Corp.
(a wholly owned subsidiary of Sonic), FirstAmerica and certain stockholders of
FirstAmerica. The stockholders of FirstAmerica who transferred their shares or
warrants to Sonic on December 10, 1999 (the "Closing Date") pursuant to the
terms of the Reorganization Agreement are identified on Schedule A attached
hereto.
In consideration for the FirstAmerica Acquisition, Sonic issued a total
of 5,209,416 shares of its Class A Common Stock to the stockholders of
FirstAmerica that were a party to the Reorganization Agreement, which shares had
an aggregate fair market value of approximately $42.7 million based on the $8
3/16 closing price of Sonic's Class A Common Stock on the New York Stock
Exchange on December 10, 1999. In addition, Sonic agreed to assume
FirstAmerica's stock option plan and the outstanding options to purchase shares
of FirstAmerica Class A Common Stock under such plan as of December 10, 1999,
pursuant to which such options were converted to options to purchase a total of
approximately 126,000 shares of Sonic's Class A Common Stock. Finally, Sonic
assumed floor plan financing indebtedness of FirstAmerica's dealership
subsidiaries of approximately $109.4 million and assumed or paid off at closing
other indebtedness of FirstAmerica totaling approximately $176.5 million. The
assumption or payoff of such indebtedness by Sonic was financed by borrowings
under Sonic's Revolving Credit Facility and Floor Plan Facility with Ford Motor
Credit Company.
The 5,209,416 shares of Sonic's Class A Common issued in the
FirstAmerica Acquisition were issued pursuant to the terms of the Reorganization
Agreement as follows: (i) Sonic issued 0.32232 of a share of its Class A Common
Stock in exchange for each share of FirstAmerica Class A and Class B Common
Stock acquired from the stockholders that were parties to the Reorganization
Agreement, (ii) in exchange for each share of FirstAmerica Preferred Stock,
Sonic issued that number of shares of its Class A Common Stock obtained by
dividing $1,000 by the average closing price per share of Sonic's Class A Common
Stock on the New York Stock Exchange for the twenty consecutive trading days
immediately preceding the Closing Date, (iii) Sonic issued 0.25526 of a share of
its Class A Common Stock in exchange for each warrant to purchase one share of
FirstAmerica Common Stock at an exercise price of $0.92 per share, and (iv)
Sonic issued 0.17655 of a share of its Class A Common Stock in exchange for each
warrant to purchase one share of FirstAmerica Common Stock at an exercise price
of $2.00 per share.
With certain limited exceptions, each of the 5,209,416 shares of
Sonic's Class A Common Stock issued in connection with the FirstAmerica
Acquisition are subject to certain "lock-up" provisions contained in the
Reorganization Agreement that extend for a period of at
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least 180 days following the Closing Date.
Pursuant to the terms of the Reorganization Agreement, FAA Acquisition
Corp. will be merged with and into FirstAmerica, which will result in
FirstAmerica becoming a wholly owned subsidiary of Sonic. At the time of the
merger, each share of FirstAmerica Common Stock not then owned by Sonic will be
converted into a right to receive cash equal to 0.32232 multiplied by the
greater of (i) the average closing price per share of Sonic's Class A Common
Stock on the New York Stock Exchange for the twenty trading days immediately
preceding the date of the merger, or (ii) $13.72. This consideration will be
subject to dissenter's rights available to such stockholders under applicable
law. The merger is anticipated to be effected on December 31, 1999.
FirstAmerica owns and operates 29 automobile dealerships located in
California and Nevada, selling the following brands of new vehicles: Acura, BMW,
Cadillac, Chevrolet, Chrysler, Dodge, Ford, Honda, Isuzu, Jeep, Lexus,
Mercedes-Benz, Mitsubishi, Nissan, Oldsmobile, Plymouth, Toyota, Volkswagen and
Volvo.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. The financial statements
of the businesses acquired in the FirstAmerica Acquisition will be filed in an
amendment to this Current Report on Form 8-K.
(b) PRO FORMA FINANCIAL INFORMATION. The pro forma financial
information required for the businesses acquired in the FirstAmerica Acquisition
will be filed in an amendment to this Current Report on Form 8-K.
(c) EXHIBITS.
Exhibit No. Description of Exhibits
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99.1* Agreement and Plan of Merger and
Reorganization dated as of October 31, 1999
by and among Sonic, FAA Acquisition Corp.,
FirstAmerica Automotive, Inc. and certain
stockholders of FirstAmerica Automotive,
Inc. listed on the signature page therein
(incorporated by reference to Exhibit 10.8
to Sonic's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1999).
*Filed previously.
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SIGNATURES
Pursuant to the requirements 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.
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SONIC AUTOMOTIVE, INC.
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Date: December 22, 1999 By: /s/ Theodore M. Wright
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Theodore M. Wright
Vice President - Finance, Chief Financial Officer,
Treasurer and Secretary
(Principal Financial and Accounting Officer)
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Schedule A
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Asian Pacific Industries
T. Al Babbington
BB Investments
Geary Plaza Irrevocable Trust
Fred Csizka
John M. Driebe
Embarcadero Automotive, LLC
Steve Hallock
Brad Hallock
Price Revocable Trust
Price Trust UA 10/5/88
Raintree Capital
Douglas Y. Bech
Ralph McBride
Thomas R. Powers
Jack R. Tompkins
Brian Tucker
Bert Wollen
Donald V. Strough
Debra Smithart
Charles Oglesby
TCW Leveraged Income Trust, L.P.
TCW Leveraged Income Trust II, L.P.
TCW Shared Opportunity Fund II, L.P.
Crescent/Mach I Partners, L.P.
TCW/Crescent Mezzanine Partners, L.P.
TCW/Crescent Mezzanine Trust
TCW/Crescent Mezzanine Investment Partners, L.P.
T.J. Holterhoff
Brown, Gibbons, Lang
Carlanee Foushee
