TORONTO, Jan. 26, 2023 /CNW/ – E Automotive Inc. d/b/a E INC (TSX: EINC) (the “Company” or “E INC”) and its sub-brand EBlock, today announced that it has entered into a definitive agreement to acquire Houston Auto Auction, Inc. (“Houston Auto Auction”), a Houston-based independent auction marketplace that specializes in commercial sales. Houston Auto Auction transacted approximately 6,500 vehicles in 2022. E INC is acquiring Houston Auto Auction for total cash consideration of US$5.5 million, with US$2.5 million payable on closing and the remaining payments split equally on the first and second anniversaries of closing. The acquisition is expected to close by February 1, 2023, subject to customary closing conditions.
“The acquisition of Houston Auto Auction represents our first asset in Texas, the second largest vehicle resale market in the U.S. This acquisition, together with our Louisiana asset, ties together two strategic local markets in the Gulf State region as we continue to build scale and strengthen our footprint in the area,” said Jason McClenahan, President and CEO of E INC. “Houston Auto Auction’s focus on commercial sales opens new opportunities for us to service commercial fleet customers. At the same time, we believe our technology, experience and capabilities with the dealer market can grow their market share. This acquisition allows us to further expand our platform and enhance our customer experience and services as we continue to develop innovative and streamlined auction solutions.”
Houston Auto Auction focuses on commercial accounts with a specialization in fleet and repossession vehicle sales and has historically generated positive EBITDA on a non-IFRS basis. The Greater Houston Area has a population of approximately 7 million served by nearly 2,100 automotive dealers located within the region.
“We’ve built a successful book of business based on our commitment and dedication to customers and our ability to provide them exceptional service,” said Tim Bowers, President and General Manager of Houston Auto Auction. “We see these same values in E INC. Their EBlock platform meets customers where they are and provides them with greater flexibility to transact across a broader market. As part of the EBlock platform, we’ll be able to bring customers new digital options and products that meet their needs which will further strengthen our long-standing customer relationships and continue to grow within the Greater Houston Area.”
E INC’s ‘land-meets-tech” strategy consists of acquiring profitable physical auction assets in the Company’s focused regional markets and integrating them onto the EBlock digital wholesale marketplace platform. EBlock’s dealer-to-dealer digital marketplace expands and enhances the reach of a physical auction to attract more sellers and buyers across a broader market. Connecting physical auctions and digital auctions across one single platform creates a network of logistics hubs which improves the flexibility offered to customers to do business where and how they prefer it.
On November 8, 2022, the Company announced it had entered into non-binding, finalized term sheets with respect to the acquisition of multiple automotive businesses (the “Proposed Acquisitions”). The Houston Auto Auction acquisition represents one of the previously proposed acquisitions. Due to macro economic pressures on the automotive market, E INC has determined it will no longer pursue the remaining Proposed Acquisitions on the previously disclosed terms at this time. The Company will remain disciplined with respect to valuations in the current market. E INC will continue to evaluate the Proposed Acquisitions and pursue additional physical auction acquisition opportunities that it believes strengthen its U.S. presence.
EBlock, an E INC brand, connects land and technology through a real-time dealer-to-dealer digital auction platform that allows dealers to buy and sell cars at EBlock physical auction locations and online in a single auction experience. With set auction times, run lists, and cars bought and sold in 60-seconds, EBlock’s platform simulates the physical auction environment with a powerful end-to-end experience.
Whether physically or digitally, EBlock empowers today’s most innovative dealerships and wholesalers to buy and sell inventory in less time.
EBlock is headquartered in Toronto, Ontario and Burlington, Vermont. Find out more about EBlock at eblock.com.
EBlock’s publicly-traded parent company, E INC, is an automotive technology company on a mission to enable the automotive ecosystem to do business however they choose and with increased velocity, by enhancing wholesale and retail experiences through technology & expertise.
Houston Auto Auction is an independent auto auction that has been in business since 1964. It is well known in its local market for specializing in “Fleet” sales and providing exemplary customer service to both commercial and repossession accounts, with many customer relationships that have sold with Houston Auto Auction for more than 30 years.
This press release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking information”) within the meaning of applicable securities laws, including statements regarding: the timing and terms of the proposed Houston Auto Auction acquisition; integrating Houston Auto Auction’s business; and future expansion and growth. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects”, “is expected”, “an opportunity exists”, “budget”, “scheduled”, “estimates”, “outlook”, “forecasts”, “projection”, “prospects”, “strategy”, “intends”, “anticipates”, “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or, “will”, “occur” or “be achieved”, and similar words or the negative of these terms and similar terminology. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information.
Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances. This forward-looking information is based on our opinions, estimates and assumptions that, while considered by the Company to be appropriate and reasonable as of the date of this press release, are subject to known and unknown risks, uncertainties, and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to: the risk that the Houston Auto Auction acquisition will not be completed on the terms proposed or at all; the risk that the Houston Auto Auction business will not perform in accordance with expectations and past history; the risk that Houston Auto Auction’s 2022 financial performance will not meet expectations; the risk that Houston Auto Auction may not be efficiently integrated or that synergies will not be realized; and those other risks discussed in greater detail under the “Risk Factors” section of our annual information form prospectus, which is available under our profile on SEDAR at www.sedar.com. If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information. Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to us or that we presently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information.
There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the Company assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
All of the forward-looking information contained in this press release is expressly qualified by the foregoing cautionary statements.
SOURCE E Automotive Inc.