AutoCanada chairman Pat Priestner acquired Whitby Oshawa Honda this week in a clever move that sees the addition of a Honda point while adhering to Honda Canada’s policy against public ownership.
Priestner’s wholly-owned holding company PPH will own 100 per cent of the equity and voting shares of the store with Priestner retaining the dealer operator title.
AutoCanada said on Wednesday it had entered into a financing arrangement with PPH, which was formed for the purposes of purchasing a Honda dealership. Under the released terms, AutoCanada provided a participatory loan to PPH to fund 80 per cent of its purchase of Whitby Oshawa Honda.
AutoCanada reports its anticipated return will be approximately equal to 80 per cent of Whitby Oshawa Honda’s net income.
The transaction was reviewed and approved by AutoCanada's independent board of directors.
“I am extremely excited about receiving Honda Canada's approval to purchase this great dealership. The Honda brand is one of the leading brands in the world automotive market and represents a significant milestone for me,” Priestner said in a statement.
Whitby Oshawa Honda has been servicing the Whitby/Oshawa area east of Toronto for over 25 years. In 2014 it sold 812 new vehicles and 725 used vehicles.
Laura Heasman, public relations coordinator with Honda Canada says the automaker approved Priestner as the new owner but that it has no relationship with AutoCanada.
“Honda's position on public ownership, as stated originally in June 2008, remains unchanged,” Honda told Canadian AutoWorld. “Honda has no relationship with AutoCanada.”