Item 1.01.  Entry into a Material Definitive Agreement.
On September 17, 2021, Sonic Automotive, Inc., a Delaware corporation ("Sonic"),
entered into an Agreement and Plan of Merger (the "Merger Agreement") with
RFJMS, Inc., a Delaware corporation and a direct, wholly owned subsidiary of
Sonic ("Merger Sub"), RFJ Auto Partners, Inc., a Delaware corporation (the
"Company"), and The Resolute Fund III, L.P., a Delaware limited partnership,
solely in its capacity as the representative of the Company's equityholders,
pursuant to which Merger Sub will merge with and into the Company (the
"Merger"), with the Company surviving the Merger and becoming a direct, wholly
owned subsidiary of Sonic. The Company is an automotive dealership platform
based in Dallas, Texas.
Subject to the terms and conditions of the Merger Agreement and other customary
adjustments set forth in the Merger Agreement, the purchase price payable by
Sonic pursuant to the Merger Agreement is expected to be (i) approximately $700
million for the goodwill and other intangible assets and real estate assets of
the Company and each of its subsidiaries (collectively, the "Company Entities")
plus (ii) the sum of the values, as determined in accordance with the terms of
the Merger Agreement, of each the parts and accessories inventory, the fixed
assets and equipment, the supplies and the repair work-in-process of the Company
Entities, plus (iii) the value of the new and used vehicle inventories of the
Company Entities, which inventories are expected to be funded through borrowings
under Sonic's existing floor plan credit facility.
Pursuant to the terms of the Merger Agreement, at the effective time of the
Merger (the "Effective Time"), (i) each share of common stock, par value $0.01
per share, of Merger Sub issued and outstanding immediately prior to the
Effective Time will be converted into one share of common stock, par value $0.01
per share, of the surviving corporation in the Merger; (ii) each share of common
stock, par value $0.001 per share, Series A preferred stock, par value $0.001
per share, and Series B voting preferred stock, par value $0.001 per share, of
the Company (collectively, "Company Capital Stock") owned by the Company (or
held in the Company's treasury) or owned by Sonic, Merger Sub or any direct or
indirect subsidiary thereof immediately prior to the Effective Time
(collectively, the "Excluded Shares") will be cancelled and retired, and no cash
or other consideration will be delivered or deliverable with respect thereto or
in exchange therefor; (iii) except for the Excluded Shares and shares of Company
Capital Stock issued and outstanding immediately prior to the Effective Time and
held by an equityholder of the Company who has not voted in favor of the Merger
(or consented thereto in writing) and who has properly exercised and perfected
appraisal or dissenters rights under Delaware law, each share of Company Capital
Stock issued and outstanding immediately prior to the Effective Time will be
cancelled and converted into the right to receive an amount in cash equal to the
sum of: (A) the applicable Per Share Merger Consideration (as defined in the
Merger Agreement) and (B) any Additional Per Share Merger Consideration (as
defined in the Merger Agreement), in each case without interest, upon delivery
in accordance with the Merger Agreement of the documents specified therein; and
(iv) each option to purchase shares of common stock of the Company that is
outstanding and unexercised immediately prior to the Effective Time will fully
vest and be automatically cancelled and converted into the optionholder's right
to receive an amount in cash, without interest, equal to (A) the applicable Per
Option Cancellation Payment (as defined in the Merger Agreement), and (B) any
Additional Per Option Cancellation Payment (as defined in the Merger Agreement),
in each case of (A) and (B), upon the terms and subject to the conditions set
forth in the Merger Agreement and less all applicable withholding taxes and
subject to reduction for any other amounts that are required or have been
authorized by the eligible optionholder to be withheld.
The Merger Agreement contains customary representations, warranties and
covenants by Sonic, Merger Sub and the Company. The consummation of the Merger
is subject to various closing conditions, including, among other things, (i) the
expiration or termination of all applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and (ii) the
consent to or the approval of the transactions contemplated by the Merger
Agreement by each Manufacturer (as defined in the Merger Agreement) whose
consent or approval is required. The Merger Agreement may be terminated under
certain circumstances, including by Sonic or the Company if the closing of the
Merger does not occur on or before 5:00 p.m., Eastern Time, on December 15,
2021, unless such party's breach of the Merger Agreement has prevented the
consummation of the Merger by such time.
Upon termination of the Merger Agreement under certain specified circumstances,
Sonic or the Company may be required to pay the other party a termination fee of
either $2.5 million or $7.5 million, depending on the timing of the termination
as set forth in the Merger Agreement.
The Merger Agreement and the transactions contemplated thereby, including the
Merger, have been approved by the Board of Directors of Sonic and the Board of
Directors of the Company, and subsequent to the execution of the Merger
Agreement, by the requisite approval of the Company's equityholders.
The representations, warranties and covenants contained in the Merger Agreement
were made solely for the benefit of the parties thereto. In addition, such
representations, warranties and covenants (i) were made only for purposes of the
Merger Agreement, (ii) were made only as of the date of the Merger Agreement or
such other date as is specified in the Merger Agreement, (iii) may be subject to
important qualifications and limitations agreed to by the parties to the Merger
Agreement in connection with negotiating its terms, including being qualified by
confidential disclosures made for the purpose of allocating
risk between the contracting parties rather than establishing matters as facts
and (iv) may be subject to a contractual standard of materiality which may
differ from what may be viewed as material by investors. Accordingly, the Merger
Agreement and the related description are included with this filing only to
provide investors with information regarding the terms of the Merger Agreement,
and not to provide investors with any financial or other factual information
regarding the parties thereto or their respective businesses or to modify or
supplement any factual disclosures about Sonic in its filings with the U.S.
Securities and Exchange Commission (the "SEC"). Investors should not rely on the
representations, warranties and covenants or any descriptions thereof as
characterizations of the actual state of facts regarding or condition of the
parties to the Merger Agreement or any of their respective subsidiaries or
affiliates. Moreover, information concerning the subject matter of the
representations and warranties may change after the date of the Merger Agreement
or earlier dates specified therein, which subsequent information may or may not
be fully reflected in Sonic's public disclosures. Accordingly, investors should
read the Merger Agreement not in isolation but in conjunction with the other
information that Sonic makes publicly available in reports, statements and other
filings with the SEC.
The foregoing description of the Merger Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of such
agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated
herein by reference.
Forward-Looking Statements. This Current Report on Form 8-K contains
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
typically are identified by use of terms such as "anticipate," "believe,"
"expect," "project," "may," "will," "should," "could" and similar words. Except
as required by law, Sonic undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise. Sonic's actual results could differ materially from those
contained in forward-looking statements due to a number of factors, including
the statements under "Risk Factors" in Sonic's most recent Annual Report on Form
10-K and in its subsequent filings with the SEC.


Item 7.01.  Regulation FD Disclosure.
On September 22, 2021, Sonic issued a press release in connection with the entry
into the Merger Agreement. A copy of the press release is attached hereto as
Exhibit 99.1 and is incorporated herein by reference.
The information in this Item 7.01, including Exhibit 99.1 attached hereto, is
being furnished and shall not be deemed to be "filed" for purposes of Section 18
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
otherwise subject to the liabilities of that section, nor shall it be deemed to
be incorporated by reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act, except as shall be expressly set forth by specific
reference in any such filing.



--------------------------------------------------------------------------------


Item 9.01.  Financial Statements and Exhibits.
(d) Exhibits.

    Exhibit
      No.              Description
             2.1         Agreement and Plan of Merger, dated as of

September 17, 2021, by and among Sonic

Automotive, Inc., RFJMS, Inc., RFJ Auto Partners,

Inc. and The Resolute Fund III,


                       L.P., as the equityholder representative.*

            99.1         Press Release of Sonic Automotive, Inc., dated September 22, 2021.

             104       Cover Page Interactive Data File (embedded within

the Inline XBRL document).

__________

* Schedules (or similar attachments) have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Sonic agrees to furnish supplementally copies of any of the omitted schedules (or similar attachments) to the SEC or the SEC staff upon request.

--------------------------------------------------------------------------------

© Edgar Online, source Glimpses