Business Acquisitions and Dispositions |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Business Acquisitions and Dispositions | Business Acquisitions and Dispositions During the six months ended June 30, 2025, we acquired four businesses in our Franchised Dealerships Segment and were awarded one franchise in our Powersports Segment, which was previously an authorized retail outlet in Sturgis, South Dakota. The businesses acquired were Jaguar Land Rover Los Angeles, Jaguar Land Rover Newport Beach, Jaguar Land Rover San Jose and Land Rover Pasadena for an aggregate gross purchase price of approximately $359.9 million. The preliminary allocation of the aggregate gross purchase price included inventory of approximately $135.6 million, property and equipment of approximately $8.0 million, goodwill of approximately $215.5 million, other assets of approximately $1.5 million, and other liabilities of approximately $0.7 million.
As the businesses acquired in 2025 were purchased on the last day of the second quarter, no revenue or earnings attributable to those businesses are included in the accompanying statements of income. Acquisition costs recognized as an expense in the June 30, 2025 consolidated statements of operations related to these acquisitions were immaterial. Additionally, the total amount of goodwill from these acquisitions that is expected to be deductible for tax purposes related to these acquisitions is approximately $215.5 million.
The following unaudited pro forma summary presents consolidated information as if the 2025 acquisitions had occurred on January 1, 2024:
We did not acquire any businesses during the six months ended June 30, 2024.
During the six months ended June 30, 2025, we terminated one domestic franchised dealership and one powersports dealership. During the six months ended June 30, 2024, we terminated two luxury franchised dealerships and disposed of one mid-line import franchised dealership, in addition to closing the remaining seven Northwest Motorsport stores within the EchoPark Segment. The disposal generated net cash of approximately $3.4 million.
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| Segment Information |
9. Segment Information
As of June 30, 2025, Sonic had three operating segments: (1) the Franchised Dealerships Segment; (2) the EchoPark Segment; and (3) the Powersports Segment. Refer to Note 1, “Description of Business and Summary of Significant Accounting Policies,” to the consolidated financial statements in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2024 for additional discussion of our operating segments. Sonic has determined that its operating segments also represent its reportable segments.
The reportable segments identified above are the business activities of Sonic for which discrete financial information is available and for which operating results are regularly reviewed by Sonic’s chief operating decision maker to assess operating performance and allocate resources. Sonic’s chief operating decision maker is a group of three individuals consisting of: (1) the Company’s Chief Executive Officer; (2) the Company’s President; and (3) the Company’s Chief Financial Officer. The chief operating decision makers evaluate segment performance and allocate resources using metrics such as segment gross profit and segment income. These segment profit metrics are consistent across all segments and align with the way we measure profit on a consolidated basis. The accounting policies applied to segments follow those for the Company as a whole.
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