Fox is sold to No. 1 U.S. auto retailer $95 million deal likely to change the business here

600 workers told of sale

Republic Industries, the buyer, has grown very big very fast


August 18, 1998|By Ted Shelsby | Ted Shelsby,SUN STAFF

Republic Industries Inc., the world's largest retailer of cars and trucks, has acquired Fox Automotive Inc., one of Maryland's largest auto dealerships, in a cash transaction estimated at $95 million.

"We have sold the company," William Hurwitz, president of Fox, said yesterday.

Fox traces its roots to 1933, when it operated a store near the Hanover Street Bridge across the Patapsco River. Today, it operates 11 new-car dealerships in the Timonium, Woodlawn, Catonsville and Laurel areas, selling nine lines of domestic and imported cars, and light trucks.

It was the 47th-largest dealership in the country last year, according to a list of the nation's top 100 dealers prepared by Automotive News. Fox sold nearly 16,500 vehicles, including new, used and fleet vehicles. The vast majority, 10,297, were new cars sold to individual customers.


Hurwitz said sales, including parts and service, totaled about $390 million.

He said Fox has about 600 workers, who were told of the sale yesterday.

The transaction is expected to have a heavy impact on the retail lTC auto industry in the Baltimore area.

Republic, which was founded by billionaire entrepreneur H. Wayne Huizenga, has gone from "zero to the biggest car dealer in the country over the past 18 months," said Peter Kitzmiller, president of the Maryland New Car and Truck Dealers Association.

Kitzmiller said this is Republic's first move into Maryland but that he does not expect it to be the company's last.

Based on Republic's record, Kitzmiller said, he expects the company to make other acquisitions in this market as it seeks to establish a cluster of outlets much like those it has formed in other cities.

"I think it is fair assume they will do other things here," Kitzmiller said. "I would assume they will want to establish a presence in the Washington market."

Big impact expected

"Republic is going to change the local automotive scene a lot," said Jacob J. Cohen, managing director for the Automotive Group of American Express Tax and Business Services Inc.'s Towson office.

Cohen said he expects Republic to make additional acquisitions in Maryland and to stimulate "a new wave of acquisition by other dealers who feel that they will have to get bigger to compete."

He said there will be much competition among area dealers to sell first.

Hurwitz said he had not considered selling Fox until the Heritage Automotive Group of Owings Mills approached him last year with an offer. He said the two sides could not reach an agreement on the price but that "it put a buzz in my ear." The negotiations with Republic started in May.

He said the wave of mergers and acquisitions in the auto industry played a major role in his decision to sell.

"We had to either join the race or we would be left at the starting gate," he said.

Hurwitz to depart

Hurwitz said he will leave Fox, but other management officials and the rest of the employees are expected to remain.

Republic picks up a strong dealership, Hurwitz said. He said Fox Chevrolet in Woodlawn is No. 1 in the market that includes Maryland, Virginia and the Carolinas. Fox Chevrolet in Laurel is No. 2, he said.

Republic, which is based in Fort Lauderdale, Fla., declined to confirm the purchase of Fox or its plans for the region.

Industry officials familiar with the transaction say an announcement from Republic is expected today.

Republic spokeswoman Debbie Ball said the company has 328 franchise locations throughout the United States. It had sales of $10.3 billion last year.

Republic's strategy is to make each car sale more profitable by slashing advertising and other expenses through consolidation.

Pub Date: 8/18/98

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