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.
The deal may serve as a precedent for future deals as the automotive industry continues to consolidate the auto franchise network.
The lenders (with The Bank of Nova Scotia as Administrative Agent, Lead Arranger and Sole Bookrunner and CIBC and RBC as Syndication Agents) were advised by Miller Thomson LLP with a team led by Nora Osbaldeston and that included Keyvan Nassiry, Jonathan Dyck, Julianna Abdo, Nelly Mosstaghimi-Tehrani, Geoffrey Marinangeli and Shaun Parekh, among others. Miller Thomson was assisted by Steven Christie and Teddy Comeau of McInnes Cooper in New Brunswick and Nova Scotia, Tim Dewart and Keith Senden of Fillmore Riley LLP in Manitoba and James Holman of Duane Morris LLP in Illinois. Mallorie Smith and Christina McSparron of Rutan & Tucker, LLP in the US advised the lenders in connection with the Grossinger acquisition.
AutoCanada was advised by lead counsel Maria Doerksen and Patrick Mah of Borden Ladner Gervais LLP, assisted by Michael Milani, QC, of McDougall Gauley LLP in Saskatchewan, Kent Fast and Megan Kelly of Fast Trippier Law in Manitoba, Charles Reagh and Andrew McMackin of Stewart McKelvey in New Brunswick and Nova Scotia, and Chuck Boehrer of Winston & Strawn LLP in the US.
There were interlender arrangements with Bank of America in the US on which Manley Roberts of McGuire Woods LLP advised.
AutoCanada also completed a related US$131-million floorplanning facility done by Bank of America. Chuck Boehrer of Winston & Strawn represented AutoCanada as Borrowers counsel and Manley Roberts of Mcguire Woods represented Bank of America.