On April 12, 2018, a syndicate of bank lenders closed a new expanded credit agreement with AutoCanada Inc. (TSX: ACQ), Canada’s largest multi-location automobile dealership group by volume, providing secured credit facilities up to $1.08 billion. The three-year credit agreement increases AutoCanada’s borrowing capacity and provides $660 million for floorplan and lease financing, $350 million for acquisitions and capital expenditures as well as $70 million for general corporate purposes. AutoCanada used this credit facility to partially finance its approximately $110 million acquisition of Grossinger Auto Group in Illinois which closed on April 9, 2018.
This deal will likely serve as a precedent for future deals as this industry continues to consolidate the auto franchise network.
The lenders (with Scotiabank acting as Administrative Agent, Lead Arranger and Sole Bookrunner and CIBC and RBC acting as Syndication Agents) were advised by Miller Thomson with a team led by Nora Osbaldeston and that included Keyvan Nassiry, Jonathan Dyck, Geoffrey Marinangeli, and Shaun Parekh (Financial Services), and Juliana Abdo and Nelly Mosstaghimi-Tehrani (Transactions & Leasing).
