In a late-July interview with Auto Remarketing, Sonic Automotive president Jeff Dyke discussed the group’s potential for expansion in regions of the country where it wasn’t yet operating.

Such growth came to fruition in a big way Wednesday, as Sonic announced it has agreed to purchase RFJ Auto Partners for $700 million — a move set to give the Charlotte, N.C.-based dealer group a presence in six new states: Washington, Idaho, Montana, New Mexico, Indiana and Missouri.

The transaction would also bring in five new brands to Sonic’s lineup — Chrysler, Jeep, Dodge, RAM and Mazda — and bump Sonic’s franchised dealer store count above 100.

 “This transaction is well-aligned with our strategy to grow our franchised dealership business by acquiring franchises that increase our geographic reach and expand our brand portfolio,” Dyke said in Wednesday’s news release.

“With my 20-plus year history with Rick Ford and much of his team, I very much respect and admire what a terrific job they have done growing and modernizing their business and see great synergies with the anticipated launch of our industry-leading digital omnichannel platform later this year,” Dyke said of RFJ Auto’s chief executive officer, who previously worked at Sonic.  “Beyond that, I am excited to once again work alongside Rick and his team as they remain in place to manage and accelerate our growth trajectory under this new partnership.”

The acquisition of RFJ Auto — one of the 15 largest dealer groups in the country based on total revenues — is likely to make Sonic one of nation’s five largest dealer groups by that same measure, the retailer said.

RFJ Auto has 33 stores throughout seven states and includes 16 brands in its portfolio. It posted revenues of $2.8 billion last year.

Sonic expects that RFJ Auto will add annualized revenues of $3.2 billion.

The retailer said that’s an incremental increase of 30% in franchised dealership revenues above its target of $25 billion in total revenues by 2025.

The total purchase price of $700 million includes both blue sky/goodwill and real estate, the retailer said.  

Sonic said the deal would be one of the largest ever for auto retail.

“We are very excited to welcome the RFJ Auto team to the Sonic family as we continue to expand our nationwide network,” Sonic Automotive and EchoPark Automotive chief executive officer David Smith said in a news release.

“RFJ Auto’s management team — many of whom are former members of the Sonic family and have deep familiarity with our guest-centric mindset and innovative sales model — and the nearly 1,700 RFJ Auto teammates are an excellent fit with the culture and growth strategy of our franchised dealership business,” Smith said. “As such, we anticipate seamless integration and expect to capture meaningful synergies from ‘day one,’ creating significant long-term value for our shareholders.”

Ford, the RFJ Auto CEO, added: “As a past member of the Sonic family, I know exactly how complementary our businesses are and I look forward to bringing together our shared commitment to guest satisfaction, innovative processes, and industry-leading technology for the benefit of all of our guests, teammates and stakeholders.”

 The move continues what has been an active buy-sell period for Sonic’s franchised dealership operations.

The retailer announced Sept. 1 it had purchased Colorado’s Audi Glenwood Springs and Glenwood Springs Volkswagen.

That move followed another transaction in the state just over a month earlier.

In late July, Sonic announced it had purchased Grand Junction Subaru and Grand Junction Volkswagen.

Shortly following that purchase, Auto Remarketing connected with Dyke, the Sonic president, who shared more about the retailer’s plans to increase its presence on the franchise new-car dealer side.

At the time of that late-July interview, the geographic footprint of Sonic’s franchised dealerships, for the most part, included the majority of the Southeast and the Washington, D.C. area, plus Texas, Colorado, Nevada and California.

The retailer saw room for growth in regions of the country in which it didn't yet have a presence.

“We’ve got acquisitions working right now that are literally from coast to coast from the North to the South … we're just now diving back into the pool from an acquisition perspective,” Dyke said that interview.

“And so, we're going to grow that side of the business. And we can now because we’ve got the capital to do it,” Dyke said. “So, you’ll hear more about that as we move forward in the coming couple of months. But for sure, we’ll delve into markets that we don’t do business in today.”