Local automobile mogul Gene Reed is planning to sell off his two Charleston area dealerships by early July in a deal valued at more than $70 million.
Reed said Wednesday that he chose to sell the businesses to Houston-based Group 1 Automotive Inc. "because they offered me a hell of a lot of money."
He said Group 1 Automotive Inc. will take over Gene Reed Toyota & Scion in North Charleston and Lexus of Charleston in West Ashley once the deal is approved by Toyota Motor Corp., which owns the car brands.
"We don't expect any problems," Reed said.
Reed will retain ownership of the properties for five years, after which Group 1, a Fortune 500 company that trades on the New York Stock Exchange, has the option to purchase them.
As part of the deal, Reed cannot open or acquire a competing dealership in Charleston for three years.
Group 1 representatives approached Reed's Gene Reed Enterprises earlier this spring about selling the two dealerships and they finally settled on an offer of "$70 million-plus," he said.
Reed said Group 1 Automotive plans to keep the local dealerships open. "They are both new facilities," he said.
Group 1 Automotive spokesman Pete DeLongchamps declined to comment about the deal Wednesday, referring questions to Reed.
Reed, 72, who has operated automobile dealerships in Charleston for more than 30 years, said he has no plans to retire.
He recently bought half of Daytona Toyota in Florida, and he owns Reed-Lallier Chevrolet in Fayetteville, N.C. He also hopes to add a Mercedes dealership in the Northeast soon.
Reed's other automotive holdings include the North Charleston property that houses Marathon Chevrolet, which announced it will close next Thursday. He also owns the real estate of what will become Marathon Automotive in Summerville, which plans to open June 11 and specialize in collision repair work, parts sales, pre-owned cars and truck sales and service.
This latest move by Reed isn't the first time he's done business with a big publicly traded car dealer. In 1997 he sold his several Chevrolet dealerships, including three in the Charleston area, to UnitedAuto Group Inc. for $17 million in cash and $13 million in stock, it was reported at the time.
Group 1 Automotive is snapping up car businesses to expand its South Carolina footprint, including Audi Columbia two weeks ago and Toyota/Scion of Rock Hill in April. It also owns BMW of Columbia.
With $4.5 billion in sales last year, Group 1 currently owns 102 dealerships, 138 franchises, 25 collision centers and 32 brands in the United States and the United Kingdom.
It intends to continue buying up domestic dealerships.
"With nearly 19,000 automobile dealerships in the United States, there are ample opportunities to find attractive acquisition candidates," according to the Texas company's website.
Asked what he planned to do with the sale proceeds, Reed said, "I'm trying to figure out where to put it."