EDMONTON, ALTA. – One of Canada’s largest dealership groups is officially a little smaller.
AutoCanada announced Wednesday it had sold the operating assets of Ontario-based Newmarket Infiniti Nissan for $11.5 million.
The sale is expected to close this week and net proceeds will be used reduce indebtedness under the company's revolving credit facility. The names of the new owner or owners were not released.
Additionally, the dealership group will proceed to sell excess lands previously acquired to facilitate construction of a separate facility for Newmarket Infiniti.
“As part of our regular evaluation of dealership performance, an unsolicited opportunity was presented to management,” explained Tom Orysiuk, AutoCanada president and CEO.
“Following a thorough review, management concluded that the dealership sale proceeds, when combined with the additional benefit of reducing the company's obligation to build a separate facility for Newmarket Infiniti, made the transaction the right thing to do from a long-term shareholder return perspective.”
The move comes on the heels of last week’s press release that stated AutoCanada would carry out a cost reduction plan intended to net $15 million in yearly savings.
“Throughout fiscal 2015, all except two of our dealerships were profitable though in the case of our Western Canadian dealerships some were at significantly reduced levels as compared to previous years,” Orysiuk said at the time.
Newmarket is roughly 75 minutes north of Toronto.