America’s Car-Mart to Acquire Texas Auto Center

Rhea-AI Summary

America’s Car-Mart, Inc. (NASDAQ:CRMT) announced the acquisition of Texas Auto Center, excluding legacy finance receivables, expected to close in the first quarter of Car-Mart’s 2025 fiscal year. The acquisition aims to strengthen Car-Mart's growth strategy, delivering exceptional outcomes for customers, associates, and shareholders. The high-performance culture and customer focus of Texas Auto Center make it a valuable addition to Car-Mart's team.

Positive

• Acquisition of Texas Auto Center to strengthen Car-Mart's growth strategy

• Expected exceptional outcomes for customers, associates, and shareholders

• Texas Auto Center's high-performance culture and customer focus as a valuable addition to Car-Mart

• Reinforced commitment to acquisitions for industry and market expansion

Negative

• None.

Insights

Market Research Analyst

The acquisition of Texas Auto Center by America's Car-Mart may be indicative of a strategic move to solidify the company's presence in Texas, a region with significant automotive sales potential. The move aligns with the growing industry trend of consolidation, where larger players acquire well-established regional entities to enhance their market share and operational synergies. This particular acquisition excludes legacy finance receivables, which suggests a cleaner balance sheet post-acquisition, potentially reducing financial risk for Car-Mart. It is essential to monitor how the integration aligns with Car-Mart's growth strategy and whether this expansion translates to improved economies of scale and market penetration, especially in the highly competitive used vehicle sector. The statement about commitment to acquisitions as part of growth could signal a proactive approach in a market where strategic M&A activities often precede organic expansion to quickly capture market opportunities.

Financial Analyst

From a financial perspective, the announcement by America's Car-Mart to acquire Texas Auto Center could be seen as a positive strategic move. The acquisition is slated to be accretive to Car-Mart's revenue, which is a vital aspect for investors seeking growth. Notably, the exclusion of legacy finance receivables might imply a strategic focus on current and future assets without inheriting past financial burdens, potentially leading to a more streamlined financial operation. Investors should analyze subsequent quarterly reports for performance indicators influenced by this acquisition, such as revenue growth, profit margins and earnings per share. If Car-Mart successfully leverages TAC's operational strengths and customer base, there could be significant long-term financial benefits, including enhanced shareholder value. However, as with any acquisition, the integration risks and costs will merit close scrutiny to ensure the projected financial synergies are realized.

ROGERS, Ark., May 02, 2024 (GLOBE NEWSWIRE) -- America’s Car-Mart, Inc. (NASDAQ:CRMT), today announced that it has entered into a definitive agreement to purchase the dealership assets of Texas Auto Center (“TAC”). The transaction, which excludes legacy finance receivables, is expected to close in the first quarter of Car-Mart’s 2025 fiscal year, which begins May 1, 2024.

Since founding Texas Auto Center in 1995, Bob and Erika Blankenship have grown their operation into an award-winning dealership group with locations in Austin and San Marcos, Texas.

“The acquisition of Texas Auto Center furthers our commitment to acquisitions being a part of our growth strategy. This acquisition will deliver exceptional outcomes for our customers, associates, and shareholders. TAC’s high-performance culture, customer focus, and strong alignment of values makes it a fantastic addition to what is an already great team,” said Douglas Campbell, President and Chief Executive Officer. “Bob and Erika are highly respected industry veterans with decades of experience delivering quality used vehicles and excellent service to their customers. We are excited to welcome them, and the entire Texas Auto Center team, to America’s Car-Mart.”

“We are very excited to enter into this relationship,” said Bob Blankenship. “My wife, Erika, and I have devoted nearly thirty years to building our business and have been honored to forge relationships with our customers. With the help of our dedicated associates, we have grown to two large dealerships, proudly serving the Austin metro area.”

“America’s Car-Mart operates with integrity, respect, and compassion, making it the perfect fit for us,” Mr. Blankenship explained. “Together, we share a mission to earn repeat business by providing quality vehicles, stress-free financing, and excellent customer service. We are committed to the success of this transaction and to satisfying the car-buying and account servicing needs of our customers for generations to come.”

“This agreement reinforces our commitment to acquisitions as a part of our growth strategy that will not only strengthen America’s Car-Mart, but the entire industry. This acquisition expands and strengthens our footprint in the Texas market,” said Vickie Judy, Chief Financial Officer. “We will continue to partner with experienced owner-operators to transition their businesses in a way that creates value for their customers and future growth opportunities for their associates as well as being accretive to our revenue.”

About America's Car-Mart

America’s Car-Mart operates automotive dealerships in twelve states and is one of the largest publicly held automotive retailers in the United States focused exclusively on the “Integrated Auto Sales and Finance” segment of the used car market. The Company emphasizes superior customer service and the building of strong personal relationships with its customers. The Company operates its dealerships primarily in smaller cities throughout the South-Central United States, selling quality used vehicles and providing financing for substantially all of its customers. For more information about America’s Car-Mart, including investor presentations, please visit our website at www.car-mart.com.

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements address the Company’s future objectives, plans and goals, as well as the Company’s intent, beliefs and current expectations regarding future growth and operating performance, including with respect to the Company’s acquisition of Texas Auto Center and other potential future acquisition opportunities, and can generally be identified by words such as “may,” “will,” “should,” “could, “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” and other similar words or phrases. These forward-looking statements are based on the Company’s current estimates and assumptions and involve various risks and uncertainties. As a result, you are cautioned that these forward-looking statements are not guarantees of future performance and that actual results could differ materially from those projected in these forward-looking statements. Factors that may cause actual results to differ materially from the Company’s projections include, but are not limited to:

• the ability to successfully identify and complete new acquisitions on conditions that are favorable to the Company;
• the possibility that an acquisition does not close when expected or at all because required conditions to closing are not received or satisfied on a timely basis or at all;
• the risk that the benefits from a transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in general economic and market conditions, consumer finance laws and regulations, and the degree of competition in the geographic and business areas in which the Company and the acquired business operate;
• the ability to promptly and effectively integrate the businesses of the Company and the acquired company;
• the reaction to the transaction of the companies’ customers, associates and counterparties; and diversion of management time on acquisition-related issues.
  

Additionally, risks and uncertainties that may affect future results include those described from time to time in the Company’s SEC filings. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.

Contacts: Vickie Judy, CFO at (479) 464-9944
Investor_relations@car-mart.com

FAQ

When is the expected closing date for the acquisition of Texas Auto Center by America’s Car-Mart?

The acquisition is expected to close in the first quarter of Car-Mart’s 2025 fiscal year, starting on May 1, 2024.

Who founded Texas Auto Center and when?

Bob and Erika Blankenship founded Texas Auto Center in 1995.

What is the stock symbol of America’s Car-Mart?

The stock symbol of America’s Car-Mart is CRMT.

What is the strategy behind the acquisition of Texas Auto Center by America’s Car-Mart?

The acquisition aims to strengthen Car-Mart's growth strategy and deliver exceptional outcomes for customers, associates, and shareholders.

How does the acquisition expand and strengthen America’s Car-Mart?

The acquisition expands and strengthens Car-Mart's footprint in the Texas market.

What values does Texas Auto Center share with America’s Car-Mart?

Texas Auto Center shares values of integrity, respect, and compassion with America’s Car-Mart.

Who is the President and Chief Executive Officer of America’s Car-Mart?

Douglas Campbell is the President and Chief Executive Officer of America’s Car-Mart.