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Republic Industries To Acquire Cross-Continent Auto Retailers, Inc.

Sep. 03, 1998

FORT LAUDERDALE, Fla., Sept. 3 /PRNewswire/ -- Republic Industries, Inc. (NYSE: RII) today announced that it has signed a definitive agreement to acquire Cross-Continent Auto Retailers, Inc. (NYSE: XC), of Amarillo, Texas.

Under the terms of the agreement, Cross-Continent shareholders will receive $10.70 in cash for each share of Cross-Continent. The transaction is valued at approximately $145 million. Bill A. Gilliland, Chairman and Chief Executive Officer of Cross-Continent, and Robert W. Hall, Senior Vice Chairman, who collectively own approximately 62 percent of Cross-Continent's outstanding shares, have agreed to vote in favor of the merger. The transaction is subject to customary closing conditions including government and manufacturer approval, and the approval of Cross-Continent stockholders. The transaction is also subject to compliance with framework agreements between Republic and certain manufacturers. The transaction is expected to close in January, 1999.

Cross-Continent Auto Retailers, Inc., owns and operates franchised automobile retail dealerships in Las Vegas, Nevada; Denver, Colorado; Amarillo, Texas, and in Oklahoma City, Oklahoma. Through its dealerships, Cross-Continent sells new and used cars and light trucks, arranges related financing and insurance, sells replacement parts and provides vehicle maintenance and repair services. For the six months ended June 30, 1998, Cross-Continent reported revenue of $316.8 million.

Steven R. Berrard, President and Co-Chief Executive Officer of Republic Industries, said the acquisition is in line with Republic's commitment to growing its presence in the auto retailing industry.

"Cross-Continent is a premier automotive retailer that adds high-quality franchises to Republic's expanding presence in several valuable markets including Las Vegas, the fastest growing metropolitan area in the nation," Mr. Berrard said.

Mr. Berrard said the acquisition, the first of a publicly traded auto retailer, signals a new phase in the evolution of the auto retailing industry. "Access to capital by being a publicly traded company is no longer enough to succeed in automotive retailing. What's required now is a strong presence in the new and used automotive markets, delivery of an easy and convenient shopping experience, and the ability to achieve internal operating and financial synergies. By bringing these qualities together under a single corporate structure, Republic Industries is working to raise the level of the customer experience while eliminating some of the inefficiencies that are part of today's automotive distribution process. We're pleased to be joined in that effort by the experienced and talented management team of Cross-Continent and we welcome all of the Cross-Continent retailers into Republic's growing network of premier automotive retailers."

Mr. Berrard noted that the retailers of the Cross-Continent network have operating margins that generally are higher than the industry average.

Commenting on the merger, Mr. Gilliland said, "Our objective has always been to build an increasingly strong portfolio of dealerships that would achieve brand, geographic and economic diversity. By joining with Republic, the leading automotive retailer in America, we are able to achieve that objective while at the same time aligning ourselves with a company whose values and strategies we respect. For its part, Cross-Continent brings to Republic an outstanding group of dealerships with some of the most profitable and best-situated dealerships in the country."

Mr. Gilliland and other key executives will sign employment agreements with Republic.

Republic Industries, Inc. operates subsidiaries in the automotive retailing, automotive rental and solid waste industries. The Company owns the nation's largest group of franchised automotive dealerships and operates the AutoNation USA used vehicle megastore chain. Republic also owns and operates National Car Rental Systems, Inc., Alamo Rent-A-Car, Inc. and CarTemps USA.

SOURCE Republic Industries, Inc.
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