SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2019

Park Place Acquisition

On December 11, 2019, we entered into an Asset Purchase Agreement and a Real Estate Purchase Agreement with certain members of the Park Place Dealership family of entities, to acquire substantially all of the assets of, and certain real property related to the businesses described in the Asset Purchase Agreement for a purchase price of approximately $1.0 billion (excluding vehicle inventory), reflecting $785.0 million of goodwill, approximately $215.0 million for real estate and leaseholds and approximately $30 million for parts and fixed assets (the "Acquisition"). This Acquisition is expected to close during the first quarter of 2020.

Park Place, based in Dallas, Texas, is one of the country's largest luxury dealer groups, with an attractive portfolio of high volume, award-winning, luxury dealerships and high-quality real estate. Park Place consists of a collection of:


•	ten luxury dealerships, including one dealership scheduled to open in the first quarter of 2020;


•	an auto auction business for wholesaling used cars; and


•	a subscription service platform that offers customers access to a range of luxury vehicles for a monthly fee.

New Senior Notes

On February 19, 2020, the Company completed its offering of senior unsecured notes, consisting of $525.0 million aggregate principal amount of 4.50% Senior Notes due 2028 (the “2028 Notes”) and $600.0 million aggregate principal amount of 4.75% Senior Notes due 2030 (the “2030 Notes” and, together with the 2028 Notes, the “Notes”). The 2028 Notes and 2030 Notes mature on March 1, 2028 and March 1, 2030, respectively. Interest is payable semiannually, on March 1 and September 1 of each year. The New Senior Notes were offered, together with additional borrowings and cash on hand, to (i) fund, if consummated, the acquisition of substantially all of the assets of Park Place, (ii) redeem all of our outstanding $600.0 million aggregate principal amount of the 6.0% Notes and (iii) pay fees and expenses in connection with the foregoing.

New BofA Real Estate Facility

In connection with the Acquisition, on February 7, 2020 we entered into the New BofA Real Estate Facility, which will provide for term loans in an aggregate amount not to exceed $280.6 million, and is expected to mature seven years from the initial funding of the facility. Borrowings under the New BofA Real Estate Facility are expected to be guaranteed by us and each of our operating dealership subsidiaries that own or lease the real estate being financed under the New BofA Real Estate Facility, and are expected to be collateralized by first priority liens, subject to certain permitted exceptions, on all of the real property financed thereunder. In connection with the Acquisition, we intend to borrow $216.6 million under the New BofA Real Estate Facility, and have the ability to make a single draw of an additional amount up to 80% of the appraised value of the property expected to be acquired at or after the consummation of the Acquisition.

Amendments to 2019 Senior Credit Facility

In connection with the Acquisition, we have obtained amendments, among other things, to (1) increase the aggregate commitments under the Revolving Credit Facility to $350.0 million, (2) increase the aggregate commitments under the New Vehicle Floorplan Facility to $1.35 billion and (3) increase the aggregate commitments under the Used Vehicle Floorplan Facility to $200.0 million. These amendments to increase the aggregate commitments will become effective concurrently with the consummation of the Acquisition. In connection with the consummation of the Acquisition, we intend to borrow approximately $387 million under the 2019 Senior Credit Facility with respect to existing Park Place vehicle inventory, consisting of approximately $237 million under the New Vehicle Floor Plan Facility and approximately $150 million under the Used Vehicle Floor Plan Facility.

Conditional Redemption Notice for Existing Notes

On February 3, 2020, we issued a conditional notice of redemption to the holders of our 6% Notes, notifying such holders that we intend to redeem all of the 6% Notes on March 4, 2020. The redemption of the 6% Notes is conditioned upon the consummation of the Acquisition. If redeemed, the 6% Notes will be redeemed at 103% of par, plus accrued and unpaid interest to, but excluding, the date of redemption. We will pay a redemption premium in connection with the redemption of the 6% Notes of $18.0 million.

Other

In January 2020, we closed on the acquisition of a dealership (comprising three franchises) in the Denver, Colorado market which increases the number of dealerships and franchises in that market to two and four, respectively.