Sale of Continental Acura, Continental Audi and Continental Mazda dealerships highlights the strength of the buy/sell market, marks 93rd Kerrigan Advisors-led dealership sale since 2015

Irvine, CA, October 26, 2020 – Kerrigan Advisors, a leading sell-side advisory firm to auto dealers in the U.S., represented and advised Continental Motors of Naperville on its recent sale of Continental Acura, Continental Audi, and Continental Mazda. Continental Audi and Mazda were sold to Chicago, Illinois-based Bill Napleton Auto Group, while Continental Acura was sold to Desmond Roberts, owner of Advantage Chevrolet of Hodgkins, Advantage Chevrolet of Bolingbrook and Advantage Toyota of River Oaks, all located in Illinois. These transactions mark the 93rd Kerrigan-led dealership sale since 2015 and the sixth Top 150 Dealership Group Kerrigan Advisors has represented. With this transaction, Kerrigan Advisors is the most active sell-side advisor to the largest dealership groups in the US.

“The auto retail industry is tracking toward record profits in 2020, despite the challenges of COVID-19. Not surprisingly, buyers in today’s active buy/sell market are seeking prime assets such as Continental’s Naperville dealerships,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “Our firm was honored to represent Joel Weinberger in the sale of his dealerships, which are among the most valuable in Chicago. Naperville is an incredible car market, and Joel’s dealerships are known for their impeccable reputation in the community and committed employees.” 

Continental Motors Group, founded in 1961, is one of the oldest and longest-running family-owned dealership groups in the Chicago area. Brothers John and Herman Weinberger opened their import repair shop in Lyons, Illinois in 1961 and quickly became new car dealers with their first franchise, Triumph, in 1962. From that point on, the family business grew through the brother’s legacy of customer support and service, ultimately leading to Joel Weinberger’s ownership of Continental Motors’ Naperville platform.  

“As a family, we are proud and thankful to be a part of the Naperville community, Chicago’s largest car market,” said Joel Weinberger.  “I am incredibly grateful for the years of hard work from my Continental team, and for the support of my customers and the community over the last three decades.” In addition to serving its thousands of happy customers, Continental has also championed local charities over the last 33 years, including the Drive for 135, an annual fundraising event to end homelessness and its annual “Driven to Care” car donation program that has put 56 cars in the hands of needy families over the past 7 years.

“The traditions that my father, John and my uncle Herman started have carried over through the years in my business,” said Weinberger. “Things like exceptional customer service and a commitment to a strong work ethic. That has passed the test of time for us, and that’s how Kerrigan Advisors approached this transaction. We selected them as our exclusive sell-side advisor to represent us for that reason and are very grateful for the expertise and assistance they provided throughout the sale process.  Their preparation, accounting review, due diligence management and ultimately closing assistance were invaluable to our transaction.”

Among Continental Motors of Naperville’s many accolades are being named Naperville’s Best Auto Dealership every year since 2009 by Naperville Magazine; Continental Audi’s recognition, three times, as an Automotive News Best Dealership to Work For, and 13 times as an Audi Magna Society award winner since 2003 as well as an Audi Magna Society Elite winner in 2018 and Continental Acura’s 20-time Precision Team Dealership of Distinction award (more than any other Acura dealership in Illinois) and Acura’s Gold Environmental Leadership Award.

“With a 60-year family legacy and a complex, multi-dealership transaction, it was vital that Kerrigan Advisors dedicate the time and energy necessary to prepare Joel’s group for sale, so we could identify the right buyers for his valuable dealerships and ensure a smooth closing,” continued Kerrigan. “Continental has a lasting family legacy that will continue to grow and evolve with the new owners, both of whom are family run with multiple generations involved.”

The Naperville dealership group is part of the larger Continental Motors Group, which Automotive News ranked as the 130th largest dealership group in 2019. With this transaction, the Weinberger family will continue to own and operate Continental Honda in Countryside (owned by brother Jay Weinberger), and Continental Toyota in Countryside (owned by cousin Cheryl Nelson). Joel Weinberger will retain and manage his Ferrari dealership in Hinsdale, Illinois.

David Blum, Scott Wasserman and Santiago Assalini of Akerman LLP served as legal counsel to the seller. Christine Smith of Crowe served as the seller’s accountant. 

Kerrigan Advisors is the most active sell-side advisor on larger transactions in the auto retail industry with the most sale proceeds per transaction of any firm.  In addition to its sell-side advisory work, the firm offers strategic consulting services to dealers and their families, including growth planning, capital raising and valuation analysis, creating value at every stage of the auto retail lifecycle.

Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, which includes Kerrigan Advisors’ signature blue sky charts, multiples, and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases monthly The Kerrigan Index™ composed of the seven publicly traded auto retail companies with operations focused on the US market.  The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here.

About Kerrigan Advisors

Kerrigan Advisors is a leading sell-side advisor and thought partner to auto dealers in the US.  The firm advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses.  Kerrigan Advisors has represented on some of auto retail’s largest transactions, including six of the Top 150 Dealership Groups in the US, more than any other firm in the industry. Led by a team of veteran industry experts with backgrounds in investment banking, private equity, accounting, finance and real estate, the firm does not take listings, rather they develop a customized approach for each client to achieve their personal and financial goals. In addition to Kerrigan Advisors’ sell-side advisory and capital raising services, the firm also provides a suite of consulting services including growth strategy, market valuation assessments, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate due diligence.

Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report of dealership buy/sell activity and franchise values, received by over 9,000 industry recipients in 35 countries.  To register to receive The Blue Sky Report®, click here (https://www.kerriganadvisors.com/the-blue-sky-report).  Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly report tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here (http://www.kerriganadvisors.com/the-kerrigan-index/).

Kerrigan Advisors’ Founder and Managing Director, Erin Kerrigan, is a recognized expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, Automotive News’ Canadian World Congress, AICPA, and NADC. She has also been quoted numerous times by The Wall Street Journal, CNBC, Bloomberg and The Economist and has been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Bank of America, Ohio Automobile Dealer Association, and SunTrust Bank. Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News.

Kerrigan Advisors Media Contact:
Melanie Webber (melanie@mwebbcom.com), mWEBB Communications, 949-307-1723

• - The low-end blue sky multiple for Kia and Hyundai increased to 3.0 from 2.5, primarily due to increased buyer demand
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• - Nissan’s high-end multiple decreased from 3.25 to 3.0. The franchise continues to struggle resulting in more Nissan franchises available for sale than buyers interested in acquiring them

The Blue Sky Report®, published by Kerrigan Advisors, is the auto retail industry's most comprehensive and authoritative quarterly report on dealership M&A activity, as well as franchise values. The quarterly report, received by over 9,000 industry recipients in 35 countries, includes analysis of all dealership transaction activity for the year, and lays out the high, average and low blue sky multiples for each franchise in the luxury and non-luxury segments. For more details and to preview the report, click here.  To sign up to receive the quarterly report, click here.

Kerrigan Advisors also releases monthly The Kerrigan Index™ composed of the seven publicly traded auto retail companies with operations focused on the US market. The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here (http://www.kerriganadvisors.com/the-kerrigan-index/).

About Kerrigan Advisors

Kerrigan Advisors is a leading sell-side advisor and thought partner to auto dealers in the US.  The firm advises auto dealers nationwide, enhancing value through the lifecycle of growing, operating and monetizing their businesses, as well as offering restructuring and turnaround consulting services.  Kerrigan Advisors has represented on auto retail’s largest transactions, including five of the Top 100 Dealership Groups in the US, more than any other firm in the industry. Led by a team of veteran industry experts, the firm does not take listings, rather Kerrigan Advisors develops a customized approach for each client to achieve their personal and financial goals. In addition to Kerrigan Advisors’ sell-side advisory and capital-raising services, the firm also provides a suite of consulting services including growth strategies, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate analysis.

Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report of dealership buy/sell activity and franchise values, received by over 9,000 industry recipients in 35 countries.  To register to receive The Blue Sky Report®, click here (https://www.kerriganadvisors.com/the-blue-sky-report).  Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly report tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here (http://www.kerriganadvisors.com/the-kerrigan-index/).

Kerrigan Advisors Media Contact:
Melanie Webber (melanie@mwebbcom.com), mWEBB Communications, 949-307-1723

Auto Dealership Buy/Sell Market Declines 9% in First Quarter 2020, as COVID-19 Brings Activity to a Standstill After a Strong Start

According to The Blue Sky Report® by Kerrigan Advisors, the pandemic’s impact on the first and second quarter will not result in dramatic changes to blue sky values, with a buy/sell rebound projected in the second half

Irvine, CA – June 8, 2020 – The 2020 auto dealership buy/sell market declined in the first quarter, falling 9.3% off 2019’s transactions pace as the COVID-19 pandemic took its toll on auto retail, according to the just-released First Quarter 2020 Blue Sky Report® by Kerrigan Advisors.  Transactions slated to close at the end of the quarter were postponed, renegotiated or, in the worst case, terminated.   However, the report indicates that blue sky values are not dramatically impacted and, with auto sales due for an uptick, a buy/sell rebound in the second half of 2020 is anticipated.

A bright start to the year was not enough to avoid severe financial whiplash as US dealerships shuttered in mid-March and consumers were told to stay home.  As a result, auto sales plummeted in March and April, resulting in one of the sharpest declines in dealership earnings on record, and the buy/sell market followed suit: Kerrigan Advisors expects the second quarter of 2020 to be the slowest buy/sell market in recent history.

“As a result of the coronavirus, auto dealers had to refocus their energy on internal operations and cash preservation in March and April,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “And while, at present, the industry is still managing through the economic effects of the health crisis, we see better days ahead thanks to the resilience of the dealer model that’s likely to thrive as dealerships reopen. In fact, with industry cost cuts and improved efficiencies, we expect auto retail will see significant improvements in profitability, making more money on less revenue, in the second half of 2020.”

Given strong buyer demand and today’s low cost of capital, The Blue Sky Report® by Kerrigan Advisors does not forecast dramatic changes in blue sky values in the foreseeable future, despite the economic impact of COVID-19 in the first and second quarter. Once again, says the report, many dealers have shown the ability to maintain profits, even during the worst of times (in the depths of the Great Recession, auto retailers remained profitable); and sellers choose to patiently wait for a buyer to reach their valuation expectations, rather than sell at a discounted valuation.  This means that the most likely impact of COVID-19 will be a slower buy/sell market in the second quarter of 2020, rather than a decline in dealership valuations. 

As auto sales rise, and buyers seek to put a substantial amount of capital to work, the report sees potential for a rebound in buy/sell activity in the second half of the year, and notes that the capital markets are experiencing a surge in auto retail valuations.  Since bottoming on March 18th, The Kerrigan Index™ has risen 81.2% through the end of May.  Also, the industry is seeing improved profits from an increased utilization of technology to cut costs as digital retailing becomes the order of the day.

“While the coronavirus will undoubtedly force some distressed dealership sales, those one-off valuations are not a reflection of the overall market,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “In fact, while this global health crisis is impacting auto retail in many different ways, industry partners, vendors, lenders and OEMS have provided dealers with tremendous financial and administrative support to ensure they weather the financial impact of lost sales and avoid closure. And, auto retailers have the most flexible cost structures within the supply chain, so they are best able to adjust to unforeseen events.  Given that, the health crisis has caused few distressed transactions.”

Kerrigan Advisors made one valuation upgrade in the First Quarter 2020 Blue Sky Report, increasing Toyota’s low-end multiple from 5.25 to 5.5. This increase reflects rising buyer demand for one of the highest quality franchises in the market and a belief that Toyota is best prepared amongst all OEMs to weather the economic impact of COVID-19. “Toyota had one of the lowest sales declines in the first quarter of any franchise and maintains the highest credit rating of the OEMs,” said Erin Kerrigan. “With a flight to quality assets, Toyota franchises are expected to command even higher multiples as buyers seek safe investments during the pandemic.”

Kerrigan Advisors has identified the following three trends, which are expected to meaningfully impact the buy/sell market for the remainder of 2020.

- Sellers’ blue sky pricing expectations exclude COVID-19 financial impact

- Surge in buyer/investor demand due to industry growth prospects and low cost of capital

- Buy/sell activity by state diverges based on level of economic shutdown

Highlights from the First Quarter 2020 Blue Sky Report® by Kerrigan Advisors include:

- Prior to COVID-19, dealership earnings through February were on track for a 38.7% increase over 2019 and near 2015’s record level.

- First quarter buy/sell activity declined 9.3%, with 49 transactions closing compared to 54 transactions during the first quarter of 2019.[1]

- The first quarter of 2020 saw a high level (31%) of multi-dealership transactions.

- Among the franchises being acquired, domestics continued to dominate in the first quarter of 2020, representing 57% of buy/sells, up 84% since 2015. Domestic dealership buy/sell market share is now consistent with franchise market share. Kerrigan Advisors expects domestics to dominate the 2020 buy/sell market, as multi-generation dealer families decide to sell post-pandemic.  Additionally, import luxury’s buy/sell market share increased in the first quarter to 18%, up 12.5% over last year.

- The public auto retailers’ spending on US dealership acquisitions in the first quarter of 2020 increased 11.5%, compared to the first quarter of 2019. The publics were expected to spend over $1 billion on acquisitions in the first quarter of 2020 with Asbury Automotive Group’s acquisition of Park Place Dealerships.

- Asbury Automotive Group terminated the Park Place acquisition on March 24th.  The company’s market capitalization declined 51.6% from the time of its announcement of the Park Place Dealerships acquisition in December to the time of the transaction termination.

- Kerrigan Advisors expects the second quarter of 2020 to be the slowest buy/sell market in recent history due to pandemic stay-at-home orders.

- Kerrigan Advisors upgraded Toyota’s low-end blue sky multiple from 5.25 to 5.5 and downgraded Ford’s low-end blue sky multiple, Buick GMC’s high-end and low-end multiples, and Nissan’s low-end and high-end blue sky multiples.

The Blue Sky Report®, published by Kerrigan Advisors, is the auto retail industry's most comprehensive and authoritative quarterly report on dealership M&A activity, as well as franchise values. The quarterly report, received by over 9,000 industry recipients in 35 countries, includes analysis of all dealership transaction activity for the year, and lays out the high, average and low blue sky multiples for each franchise in the luxury and non-luxury segments. For more details and to preview the report, click here.  To sign up to receive the quarterly report, click here.

Kerrigan Advisors also releases monthly The Kerrigan Index™ composed of the seven publicly traded auto retail companies with operations focused on the US market. The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here (http://www.kerriganadvisors.com/the-kerrigan-index/).

About Kerrigan Advisors

Kerrigan Advisors is a leading, national sell-side advisor and thought partner to auto dealers in the US.  The firm advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses.  Kerrigan Advisors has represented on auto retail’s largest transactions, including five of the Top 100 Dealership Groups in the US, more than any other firm in the industry. Led by a team of veteran industry experts in coast to coast offices, the firm does not take listings, rather it develops a customized approach for each client to achieve their personal and financial goals. In addition to Kerrigan Advisors’ sell-side advisory and capital-raising services, the firm also provides a suite of consulting services including growth strategies, capital allocation, transactional due diligence, open point proposals, operational improvement, restructuring services and real estate due diligence.

Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report of dealership buy/sell activity and franchise values, received by over 9,000 industry recipients in 35 countries.  To register to receive The Blue Sky Report®, click here (https://www.kerriganadvisors.com/the-blue-sky-report/).  Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly report tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here (http://www.kerriganadvisors.com/the-kerrigan-index/).

Kerrigan Advisors’ Founder and Managing Director, Erin Kerrigan, is a recognized expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, Automotive News’ Canadian World Congress, AICPA, and NADC. She has also been quoted numerous times by The Wall Street Journal, CNBC, Bloomberg and The Economist and has been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Bank of America, Ohio Automobile Dealer Association, and SunTrust Bank. Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News.

Kerrigan Advisors Media Contact:
Melanie Webber (melanie@mwebbcom.com), mWEBB Communications, 949-307-1723

Team leverages turnaround experience gained during Great Recession to help dealerships survive in wake of COVID-19  

Irvine, CA –April 27, 2020– Kerrigan Advisors, in the wake of the global economic shock caused by the new coronavirus (COVID-19), has added confidential financial restructuring and turnaround services for auto dealerships to its consulting practice.  The Kerrigan Advisors team’s deep experience helping businesses with successful restructuring, honed during the Great Recession, and their continued focus on assisting dealers in major strategic decisions, offers dealers a unique resource as they manage through this challenging period.

“Nearly 20% of auto dealerships closed their doors as a result of the Great Recession of 2008[1] with devastating impacts on local economies.  Without serious planning and action, the current crisis could precipitate more closures of US auto dealerships,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors.  “Kerrigan Advisors is dedicated to putting our expertise to work to help the nation’s auto dealers successfully navigate this very difficult crisis and avoid closures.”

“While the current crisis is not the result of specific economic vulnerabilities, there is no doubt the impact will be resounding – car sales were down 39% in March, and trending 55% down for the first two weeks of April, per JD Power. We know from our experience in 2008-2009 that if businesses pre-emptively take the right actions, they can survive and, ultimately, thrive after a crisis such as this,” continued Kerrigan. During the 2008 recession, Erin Kerrigan successfully led nearly a half a billion dollars’ worth of workouts on behalf of a major REIT and has the expertise to assist dealers to determine the right steps to manage through the current economic crisis. 

Kerrigan Advisors is a leading advisor to dealership groups across North America in navigating key strategic decisions.  With its expanded consulting service offering, the firm is well-positioned to assist dealers as they manage through the restructuring process with lenders, landlords and other creditors to achieve a mutually beneficial outcome.  Kerrigan Advisors provides counsel to dealers during the critical strategic planning phase of restructuring and assists with operational performance issues and turnaround requirements.  Key services include:

- Identify potential covenant defaults and review cure options
- Manage lender, creditor and landlord negotiations
- Develop go-forward business plans post-default
- Implement operational restructuring
- Develop/review cost reduction initiatives and execution milestones
- Implement cash conservation guidelines and controls

“Auto retailers are going to face some serious headwinds in the coming months. Metrics-based operations, cost control and cash flow planning will all be critical in managing through this cycle,” said Ryan Kerrigan, Managing Director of Kerrigan Advisers, whose expertise includes 5 years at McKinsey & Company advising Fortune 500 companies with strategic planning, operations and organizational issues, and profitability improvement.     

“We have built a team that is uniquely qualified to serve auto dealers at this time. Erin and I both conducted significant restructuring work in the prior cycle. Gabe Robleto has worked through countless negotiations and restructuring of real estate contracts. Mercedes Hendricks has advised many dealers through cash flow planning, and Wayne Meyer is an accomplished auto retail executive with significant operational turnaround experience at the dealership level. Collectively, the expertise of the Kerrigan Advisors team has proven invaluable in helping auto dealerships survive through financial hardship,” continued Kerrigan.

Kerrigan Advisors’ suite of consulting services also includes growth strategies, capital allocation, transactional due diligence, return on investment analysis, open point proposals, valuation, operational improvement and real estate advisory.  In addition, Kerrigan Advisors is well known as one of the top sell-side advisors in the auto retail industry.

About Kerrigan Advisors

Kerrigan Advisors is a leading sell-side advisor and thought partner to auto dealers in the US.  The firm advises auto dealers nationwide, enhancing value through the lifecycle of growing, operating and monetizing their businesses, as well as offering restructuring and turnaround consulting services.  Kerrigan Advisors has represented on auto retail’s largest transactions, including five of the Top 100 Dealership Groups in the US, more than any other firm in the industry. Led by a team of veteran industry experts, the firm does not take listings, rather Kerrigan Advisors develops a customized approach for each client to achieve their personal and financial goals. In addition to Kerrigan Advisors’ sell-side advisory and capital-raising services, the firm also provides a suite of consulting services including growth strategies, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate analysis.

Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report of dealership buy/sell activity and franchise values, received by over 9,000 industry recipients in 35 countries.  To register to receive The Blue Sky Report®, click here: www.kerriganadvisors.com/the-blue-sky-report.  Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly report tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here: www.kerriganadvisors.com/the-kerrigan-index/.

Kerrigan Advisors Media Contact:
Melanie Webber (melanie@mwebbcom.com), mWEBB Communications, 949-307-1723

Crisis triggers a 47.9% decline from 52-week high in December;  Kerrigan Advisors release additional insights into automotive retail ramifications

Irvine, CA – March 26, 2020 – Kerrigan Advisors, in the wake of the global economic shock caused by the coronavirus disease (COVID-19), has released The Kerrigan Index™ as of March 31, 2020, which is comprised of the seven publicly-traded auto retailers. When taken in context with Kerrigan Advisors just-released 2019 Blue Sky Report®, the updated Kerrigan Index provides the firm’s initial view on the short-and-mid-term ramifications of the crisis on dealership valuations and the buy/sell market, as well as on 2021 trends and prospects.  

Through Tuesday, March 31st, The Kerrigan Index reveals a devastating 37.7% decline for the month, more than triple that experienced by the S&P 500. Year-to-date, The Kerrigan Index is down 42.6%, and is currently 47.9% below its 52-week high, which was achieved in mid-December 2019, just three months ago. The Kerrigan Index™ is now trading at levels not seen since 2012.

“After an incredible year in 2019, it has been a roller coaster since news of COVID-19’s spread started to consume the industry,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “We had a strong start to 2020 but, not surprisingly, March has been a very challenging month for auto retailers. Our firm expects the buy/sell market to slow dramatically in the second quarter of 2020.  Having said that, we believe private dealership values will not decline to the same degree we’re seeing public company values plummet.”  

A special edition of The Kerrigan Index released on March 23rd highlighted that auto retail is primarily a private industry with the publics owning just 6% of dealerships.  As such, while the publics’ valuations provide insight into valuation trends, they do not usually determine the market value of a private dealership.  The Blue Sky Report noted that the publics represented only 5% of the buy/sell market in 2019.

“Car dealers have proven time and time again their ability to survive, even in the worst of times. We expect they will do so again, once this pandemic is under control. Those who are considering a sale will wait until the industry returns to a more normal state and the buy/sell market reactivates, likely in the second half of the year. In the meantime, we focus on health and hope for calm,” said Erin Kerrigan.

The Kerrigan Index also noted that while COVID-19 will undoubtedly force some distressed dealership sales, those sales are not considered benchmarks for industry valuations, as most dealers today have strong balance sheets and can patiently wait for the right time to go to market. 

According to Kerrigan Advisors’ 2019 Blue Sky Report® , after a slow start in the first half of the year, the 2019 auto dealership buy/sell market had the most active second half on record leading to 233 completed transactions[1] for the full year – the second highest number since 2014, and the sixth consecutive year of over 200 transactions.  This was fueled by a high level of multi-dealership transactions and an increase in average dealership earnings and blue sky values.

“We are profoundly aware of dealer anxiety in the current crisis, but auto retail will bounce back much faster than many other sectors of retail.  We just need to wade through this crisis, get to the other side, and then start rebuilding.  Experienced dealers know the playbook.” said Ryan Kerrigan, Managing Director of Kerrigan Advisors.

“The business model is resilient because of its diversification with fixed operations and used vehicle revenue often sustaining losses in new vehicle sales. It is for this reason that buyer demand has recently been so high for dealerships.  We anticipate demand will bounce back as we come out of this crisis,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors.

The Kerrigan Index Highlights

The mid-March Kerrigan Index vividly details the altered state of the automotive retail industry as it grapples with state-wide lockdowns, uncertainty about the crisis, and the continuing economic freefall -- albeit with optimism for the future. The special edition also examines the balance sheet strength of the seven public auto retailers, including CarMax, AutoNation, Penske Automotive Group, Lithia Motors, Group 1 Automotive, Asbury Automotive Group and Sonic Automotive, in light of the global COVID-19 pandemic and its economic aftermath that has rattled investors and sent stock prices plummeting.

Notable points include:

 - Major banks now predict a global recession (defined as two quarters of negative growth)

 - Goldman Sachs expects US GDP to decline by 24% in the second quarter of 2020 and 3.8% for the full year.

 - RBC Capital Markets now predict US auto sales will fall to 13.5 million vehicles, 20% below last year’s sales.

 - Buy/sell market is likely to be impacted through Q2 2020; expect a resurgence in the second half of 2020, with optimistic trends playing into 2021.

 - As a group, The Kerrigan Index component companies have a combined total debt (including floorplan)-to-equity ratio of 2.7x, and long-term debt-to-equity ratio of 0.7x. Historically, floor plan debt has not proven to be risky as long as operators stay “in trust”; as such, overall debt levels are reasonable and should provide ample resources to work through the financial challenges of the coming months.

 - Excluding CarMax’s $8.8 billion market capitalization, The Kerrigan Index’s new car retailers as of March 31st are now collectively valued at just over $9.3 billion. This compares to their collective value of $17 billion at the end of 2019.

 - For the month of March, Sonic Automotive posted the largest loss of 51.7%, followed by Group 1 Automotive (-48.1%), Penske Automotive Group (-39.2%), CarMax (-38.4%), Asbury Automotive Group (-37.8%), Lithia Motors (-31.3%) and AutoNation (-29.7%).

Kerrigan Advisors’ Long View

Over the long term, Kerrigan Advisors expects strength and stability in the buy/sell market, as evidenced by outside capital’s growing interest in auto retail. “We continue to speak with investors who are seeking investments in auto dealerships.  These investors are keenly aware of how well auto retail performed coming out of the Great Recession and believe now is the time to invest as the industry consolidates and capitalizes on efficiencies from digital retailing,” continued Erin Kerrigan.

The 2019 Blue Sky Report® found that an increasing number of experienced operators are linking up with private equity sources to grow their dealership groups. The number of dealerships owned by Top 100 Dealership Groups backed by private equity capital has increased 123% since 2014.  In 2020, Kerrigan Advisors believes this will continue as investors seek to buy on a downturn, knowing strong growth prospects are ahead.

“Now that we are in a more challenging time, we are hearing from more family offices, high net worth individuals and private equity firms,” said Ryan Kerrigan. “They believe valuations will be more attractive and, as a result, they will be more interested in buying dealerships; plus, they see a long runway of acquisitions ahead as the industry continues to consolidate and digitize”

The Blue Sky Report® by Kerrigan Advisors covers dealership M&A activity as well as franchise values, including analysis of all transaction activity and lays out the high, average and low blue sky multiples for each franchise in the luxury and non-luxury segments. The 2019 Annual Report also includes Kerrigan Advisors’ annual review of each franchise, discussing buyer demand, franchise profitability, product pipeline and sales expectations for 2020.  For the 4th quarter of 2019, the following adjustments were made to Kerrigan Advisors’ Blue Sky Multiples:

- Increased Chrysler Dodge Jeep Ram (“CDJR”) blue sky multiple to 3.5 – 4.5

- Lowered Buick, GMC’s blue sky multiple to 2.75 – 3.75

- Lowered Infiniti’s blue sky multiple to 2.5 – 3.5

- Initiated Lincoln’s blue sky multiple at 2.5 – 3.5

Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, which includes Kerrigan Advisors’ signature blue sky charts, multiples, and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases monthly The Kerrigan Index™ composed of the seven publicly-traded auto retail companies with operations focused on the US market. The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here.

About Kerrigan Advisors

Kerrigan Advisors is a leading sell-side advisor and thought partner to auto dealers in the US.  The firm advises auto dealers nationwide, enhancing value through the lifecycle of growing, operating and monetizing their businesses.  Kerrigan Advisors has represented on auto retail’s largest transactions, including five of the Top 100 Dealership Groups in the US, more than any other firm in the industry. Led by a team of veteran industry experts, the firm does not take listings, rather Kerrigan Advisors develops a customized approach for each client to achieve their personal and financial goals. In addition to Kerrigan Advisors’ sell-side advisory and capital-raising services, the firm also provides a suite of consulting services including growth strategies, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate analysis.

Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report of dealership buy/sell activity and franchise values, received by over 9,000 industry recipients in 35 countries.  To register to receive The Blue Sky Report®, click here (https://www.kerriganadvisors.com/the-blue-sky-report).  Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly report tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here (http://www.kerriganadvisors.com/the-kerrigan-index/).

Kerrigan Advisors’ Founder and Managing Director, Erin Kerrigan, is a recognized expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, Automotive News’ conferences, AICPA, and NADC. She has also been quoted numerous times by The Wall Street Journal, CNBC, Bloomberg and The Economist and has been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Bank of America, Ohio Automobile Dealer Association, and SunTrust Bank. Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News.

Kerrigan Advisors Media Contact:
Melanie Webber (melanie@mwebbcom.com), mWEBB Communications, 949-307-1723

Kerrigan Advisors Represents Fields Automotive Group in Sale of Florida Dealerships; Transaction Marks 13th Kerrigan-led Dealership Sale in the last 12 months

Fields Volvo and Fields Volkswagen of Daytona Beach acquired by Gunther Motor Company

Irvine, CA, February 28, 2020 – Kerrigan Advisors, a leading sell-side advisory firm to auto dealers in the U.S., represented and advised Fields Automotive Group of Chicago, Illinois on the recent sale of Fields Volvo Cars and Fields Volkswagen of Daytona Beach to Gunther Motor Company of Delray, Florida. The transaction marks the 88th and 89th dealership sale that Kerrigan Advisors has represented since 2015, more than any other advisory firm in the industry. The Fields sale brings the total number of dealerships sold by Kerrigan Advisors in the last 12 months to 13 dealerships. 

“Fields Automotive Group is among North America’s premier luxury dealer groups for a reason – they put their customers and employees first, inside the dealership and throughout their communities,” said Erin Kerrigan, Managing Director of Kerrigan Advisors. “Our approach to this transaction mirrored these values:  a service-first mindset that leveraged our deep knowledge of dealership buyers in Florida to ensure a successful sale for our client.”

Fields Automotive has been selling and servicing cars across the eastern United States since 1971, from Illinois (and its first dealership) to North Carolina to Florida. The group’s investments also reflect their strong commitment to local and national philanthropy, including the March of Dimes Chef's Auction and the host of “The Art of the Vine,” which benefits the New Hope for Kids Program of Central Florida.

“Over the years, we’ve grown to 32 dealerships in four states, and we are proud and thankful for the hard work of our employees and the support of the communities we serve,” said John Fields, CEO of Fields Automotive Group. “We are pleased to sell these stores to one of the strongest VW and Volvo dealers in the country, and we appreciate the professionalism and hard work of Kerrigan Advisors that ensured that this transaction got done.”

“Florida’s auto retail market is one of the best in the country,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “Our understanding of this market, combined with our experience leading multiple recent successful transactions in the region, were key to a sale that made economic sense for Fields while preserving the quality standards established for both dealership brands.”

“Fields Automotive Group has built its legacy on providing superior customer service to the communities in which we operate,” said Shermin Pelinski, General Counsel of Fields Automotive Group. “That’s what Kerrigan Advisors did for us, in representing our sale: they anticipated and acted on our needs and provided smart and strategic counsel, all while making the process seamless and smooth.” 

Christopher Brockman and Karen Havice of Holland & Knight served as legal counsel to the seller. Gregory A. McLaughlin of Tripp Scott served as legal counsel to the buyer.

Kerrigan Advisors is the most active sell-side advisor in the auto retail industry.  In addition to its sell-side advisory work, Kerrigan Advisors offers strategic consulting services to dealers and their families, including growth planning, capital raising and valuation analysis, creating value at every step of the auto retail lifecycle.

Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, which includes Kerrigan Advisors’ signature blue sky charts, multiples, and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases monthly The Kerrigan Index™ composed of the seven publicly traded auto retail companies with operations focused on the US market.  The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here.

About Kerrigan Advisors

Kerrigan Advisors is a leading sell-side advisor and thought partner to auto dealers in the US.  The firm advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses.  Kerrigan Advisors has represented on auto retail’s largest transactions, including five of the Top 100 Dealership Groups in the US, more than any other firm in the industry. Led by a team of veteran industry experts, the firm does not take listings, rather develops a customized approach for each client to achieve their personal and financial goals. In addition to Kerrigan Advisors’ sell-side advisory and capital-raising services, the firm also provides a suite of consulting services including growth strategies, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate due diligence.

Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report of dealership buy/sell activity and franchise values, received by over 9,000 industry recipients in 35 countries.  To register to receive The Blue Sky Report®, click here (https://www.kerriganadvisors.com/the-blue-sky-report).  Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly report tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here (http://www.kerriganadvisors.com/the-kerrigan-index/).

Kerrigan Advisors’ Founder and Managing Director, Erin Kerrigan, is a recognized expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, Automotive News’ Canadian World Congress, AICPA, and NADC. She has also been quoted numerous times by The Wall Street Journal, CNBC, Bloomberg and The Economist and has been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Bank of America, Ohio Automobile Dealer Association, and SunTrust Bank. Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News.

Kerrigan Advisors Media Contact:
Melanie Webber (melanie@mwebbcom.com), mWEBB Communications, 949-307-1723

Kerrigan Advisors Represents RPM Luxury Sales, Inc. in Sale of 2 Lexus Dealerships; Marks 6th & 7th Lexus Dealership Kerrigan Advisors has Sold since 2015

Lexus of Sacramento and Lexus of Roseville, the only Lexus dealerships in the greater Sacramento metro area, acquired by Lithia Motors

Irvine, CA, February 19, 2020 – Kerrigan Advisors, a leading sell-side advisory firm to auto dealers in the U.S., represented and advised the owner on the recent sale of Lexus of Sacramento and Lexus of Roseville (RPM Luxury Sales, Inc.) to Lithia Motors. RPM Luxury Sales, Inc. is comprised of the only two Lexus dealerships in the Sacramento MSA.  The sale marks the 86th and 87th dealership sale, and the 6th and 7th Lexus franchise sale, Kerrigan Advisors has represented since 2015, more than any other advisory firm in the industry.  

In 1989, RPM opened Lexus of Sacramento on Fulton Avenue, Sacramento’s original car row, and in 2003 the company opened Lexus of Roseville as a companion point. Lexus of Sacramento and Lexus of Roseville earned the Elite of Lexus award for a combined 36 years; Sacramento was first to be named Elite in 1992 and the store went on to earn the distinction for 19 consecutive years from 1999 to 2018. Lexus of Roseville, meanwhile, earned the Elite distinction every single year since its opening in 2003 for a total of 16 years. The Elite of Lexus award is the highest honor a Lexus dealer can receive.

“The Elite award is a perfect symbol of RPM’s spirit of excellence and high level of customer and community service,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “These dealerships are truly top notch, located in the highest volume auto retail markets in the Sacramento MSA, with impressive histories of success.  Our experience with 7 previous Lexus transactions was key in enabling us to lead this sale process to success for RPM.”

 “Kerrigan Advisors’ deep insights into the current buy-sell market, their expertise selling Lexus franchises, and their attention to how this decision factored into our company’s long term business goals, gave us peace of mind as they shepherded us through a successful sale process,” said the owner of RPM Luxury Sales, Inc.

In addition to representing the dealerships’ decades of first-class sales and service commitment, Kerrigan was also focused on balancing the high buyer demand for Lexus in a major California metropolitan area.

“It was important, going into this, to remember that Lexus has the highest sales per franchise of all luxury franchises and the lowest number of dealers in its network,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “Of course, Lexus is known for its results. We applied our experience with other Lexus transactions, and examined the unique and remarkable story of Lexus in the Sacramento MSA, to achieve a transaction that met the goals of our client.  In the last 12 months alone, we have represented on the sale of 5 Lexus franchises, as the network finds more families deciding now is the time to exit, primarily due to a lack of succession.”

David Meyer of Arent Fox LLP served as legal counsel to the seller.

Kerrigan Advisors is the most active sell-side advisor in the auto retail industry.  In addition to its sell-side advisory work, Kerrigan Advisors offers strategic consulting services to dealers and their families, including growth planning, capital raising and valuation analysis, creating value at every step of the auto retail lifecycle.

Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, which includes Kerrigan Advisors’ signature blue sky charts, multiples, and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases monthly The Kerrigan Index™ composed of the seven publicly traded auto retail companies with operations focused on the US market.  The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here.

About Kerrigan Advisors

Kerrigan Advisors is a leading sell-side advisor and thought partner to auto dealers in the US.  The firm advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses.  Kerrigan Advisors has represented on auto retail’s largest transactions, including five of the Top 100 Dealership Groups in the US, more than any other firm in the industry. Led by a team of veteran industry experts, the firm does not take listings, rather develops a customized approach for each client to achieve their personal and financial goals. In addition to Kerrigan Advisors’ sell-side advisory and capital-raising services, the firm also provides a suite of consulting services including growth strategies, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate due diligence.

Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report of dealership buy/sell activity and franchise values, received by over 9,000 industry recipients in 35 countries.  To register to receive The Blue Sky Report®, click here (https://www.kerriganadvisors.com/the-blue-sky-report).  Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly report tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here (http://www.kerriganadvisors.com/the-kerrigan-index/).

Kerrigan Advisors’ Founder and Managing Director, Erin Kerrigan, is a recognized expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, Automotive News’ Canadian World Congress, AICPA, and NADC. She has also been quoted numerous times by The Wall Street Journal, CNBC, Bloomberg and The Economist and has been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Bank of America, Ohio Automobile Dealer Association, and SunTrust Bank. Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News.

Kerrigan Advisors Media Contact:
Melanie Webber (melanie@mwebbcom.com), mWEBB Communications, 949-307-1723

Kerrigan Advisors Represents Altoona Honda in Sale, Marks 11th Honda Dealership Kerrigan Advisors has Sold Since 2015

A President’s Award-Winning Honda Dealership in Western Pennsylvania Changes Ownership 

Irvine, CA, February 12, 2020 – Kerrigan Advisors, a leading sell-side advisory firm to auto dealers in the U.S., represented and advised partners Bill Barnes and Paul Ritchie on their recent sale of Altoona Honda to Timbrook Automotive. The partners will continue to own and operate Hagerstown Honda and Hagerstown Kia. Timbrook Automotive has 11 dealerships throughout Maryland, Virginia, and West Virginia. This sale marks the 85th dealership sale and 11th Honda franchise sale Kerrigan Advisors has represented since 2015, making the firm the most active in the marketplace.

“Altoona Honda has always been an integral part of the community here in Blair County,” said partner Bill Barnes. “When we purchased the dealership in 2013, our aim was to respect and continue the values established in 1972, when the store opened. We went into this transaction with the same mindset. Kerrigan Advisors helped us achieve a transaction reflective of that wish, with ethical and professional representation and by identifying a buyer who shared our same values.”  

Altoona Honda’s long record of success includes winning the Honda President’s Award for three consecutive years. The award recognizes Honda dealerships that achieve excellence in all aspects of sales and service operations.

“Altoona Honda has always exhibited the highest levels of excellence and is a pillar of the community. We knew how very important this decision was to Bill and Paul and were honored to represent them in the sale,” said Erin Kerrigan, Managing Director of Kerrigan Advisors. “Our experience through ten previous Honda transactions helped inform this process, ensuring that we identified a buyer who not only understood Altoona Honda’s legacy of quality and service, but one that would carry on that legacy, while living up to the values of the Honda brand.”

Barnes and Ritchie will continue to own and operate Hagerstown Honda and Hagerstown Kia dealerships. The sale to Timbrook Automotive enables them to focus on their Hagerstown dealership operations, while ensuring that Altoona Honda continues to thrive.

“When it was time to find a buyer for Altoona Honda, we wanted an advisor that had plenty of Honda experience, as well as one who understood the integral role Altoona plays in this community,” continued Barnes. “The wisdom, business acuity and sensitivity that Kerrigan Advisors displayed in previous Honda dealership transactions convinced me that they were the right partners for us. And we were not wrong. The Kerrigan Advisors team did an excellent job representing the dealership in a successful sale. I could not be more pleased.”

Gabe Robleto, Vice President of Kerrigan Advisors said, “Honda is known for its strong throughput, and very consistent dealership profitability and is highly sought after by today’s buyers.  Our experience with other Honda transactions meant we knew how to value the franchise and what to look for in a potential buyer. With Timbrook as the new owner, we are confident Altoona Honda will continue to compete for Presidents Awards and service the greater Altoona community long into the future.”

Michael G. Charapp of Charapp & Weiss LLP served as legal counsel to the seller.  Wayne C. Heavener of Skidmore & Alderson served as legal counsel to the buyer.

Kerrigan Advisors is the most active sell-side advisor in the auto retail industry.  In addition to its sell-side advisory work, Kerrigan Advisors offers strategic consulting services to dealers and their families, including growth planning, capital raising and valuation analysis, creating value at every step of the auto retail lifecycle.

Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, which includes Kerrigan Advisors’ signature blue sky charts, multiples, and analysis for each franchise in the luxury and non-luxury segments. To download the report, click here. The company also releases monthly The Kerrigan Index™ composed of the seven publicly traded auto retail companies with operations focused on the US market.  The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here.

About Kerrigan Advisors

Kerrigan Advisors is a leading sell-side advisor and thought partner to auto dealers in the US.  The firm advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses.  Kerrigan Advisors has represented on auto retail’s largest transactions, including five of the Top 100 Dealership Groups in the US, more than any other firm in the industry. Led by a team of veteran industry experts, the firm does not take listings, rather develops a customized approach for each client to achieve their personal and financial goals. In addition to Kerrigan Advisors’ sell-side advisory and capital-raising services, the firm also provides a suite of consulting services including growth strategies, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate due diligence.

Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report of dealership buy/sell activity and franchise values, received by over 9,000 industry recipients in 35 countries.  To access The Blue Sky Report®, click here (https://www.kerriganadvisors.com/the-blue-sky-report-a-kerrigan-quarterly-third-quarter-2019-preview/).  Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly report tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here (http://www.kerriganadvisors.com/the-kerrigan-index/).

Kerrigan Advisors’ Founder and Managing Director, Erin Kerrigan, is a recognized expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, Automotive News’ Canadian World Congress, AICPA, and NADC. She has also been quoted numerous times by The Wall Street Journal, CNBC, Bloomberg and The Economist and has been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Bank of America, Ohio Automobile Dealer Association, and SunTrust Bank. Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News.

Kerrigan Advisors Media Contact:
Melanie Webber (melanie(at)mwebbcom.com), mWEBB Communications, 949-307-1723

Auto Dealership Buy/Sell Market Accelerates in Third Quarter 2019, Building Momentum for a Strong Finish to 2019 with Another 200+ Transaction Year

According to The Blue Sky Report® by Kerrigan Advisors, buy/sell market expected to finish at 2018 levels; average dealership earnings annualizing to 9.3% increase, on pace to reach 2015 peak profit level of $1.5M

Irvine, CA – December 16, 2019 – The 2019 auto dealership buy/sell market picked up speed during the third quarter and is now poised to register another 200+ transaction year in 2019 – meeting or exceeding 2018 activity levels with over 160 completed transactions at the end of the quarter[1].  According to the just-released Third Quarter 2019 Blue Sky Report® by Kerrigan Advisors, the growth in the buy/sell market is supported by a healthy US economy, led by consumer spending and spurred by a reduction in the Federal Funds Rate by a quarter percentage point – the third such rate reduction since July.  And fueling the strength of the buy/sell market is strong dealership earnings growth, largely driven by used vehicles and fixed operations.

“The industry’s ability to grow earnings despite flat new vehicle sales really shows the resilience of the dealer model,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “That impresses investors and, with more sellers coming to market, buyers are here, seeking acquisitions and investment in auto retail. We see an expanding pool of well-funded buyers that will easily absorb the increase in sellers – and keep the buy/sell equilibrium into 2020.”

That balance is based on positive investor sentiment, driven by growing industry profits. The best indication is the outperformance of The Kerrigan Index™, which is up an incredible 53% through November 2019, surpassing the S&P 500’s performance by 111%.  The Kerrigan Index is now just 6% below its June 2015 peak.

The buy/sell market, and the strength of the economy, has also influenced the acquisition strategy of US public dealership groups. “Even though the publics reduced their acquisitions spending in 2019, we believe this was a byproduct of the 2018 decline in their market capitalizations,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “Considering their year-to-date valuation rebound, we expect the publics’ US dealership acquisition spending to rise over the next six months, as evidenced by Asbury’s recent announcement of its billion-dollar acquisition of Park Place Dealerships.” 

Kerrigan Advisors’ The Blue Sky Report found that since the first quarter of 2019, the publics average blue sky multiple increased 48%, as a result of rising stock prices. At the end of the third quarter, the publics’ blue sky multiples averaged 6.5x. At this level, US dealership acquisitions are more attractive targets.

In addition, the report identified the following three trends, which are expected to meaningfully impact the buy/sell market into the first quarter of 2020.

- Top franchises still receive multiples on pro forma earnings

- Image requirements are a wild card in today’s buy/sells

- Buyers increasingly focus on management in transactions

- Highlights from the Third Quarter 2019 Blue Sky Report® by Kerrigan Advisors include:

• Average dealership blue sky values increased 2.9% in 2019 due to improvements in earnings and relative stability in average blue sky multiples.

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• - Volkswagen’s lower end multiple increased from 2.0 to 2.5. This is a result of several positive indicators for the franchise, including rising buyer demand, 2019 sales growth and the OEM’s renewed focus on dealership profitability.

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• - Chevrolet and Ford’s high-end multiples were downgraded from 5.0 to 4.5 and their low-end multiples were downgraded from 4.0 to 3.75.  Buyers’ willingness to pay higher multiples for these franchises is beginning to diminish in part due to their increasing reliance on truck sales, which are considered more economically cyclical.

- Nissan’s low-end multiple was downgraded this quarter from 3.0 to 2.5. This decline reflects the continued challenges faced by the franchise, both from an OEM management standpoint and a buyer demand perspective.

- The multiple outlook for Audi was also downgraded this quarter. Audi sales are underperforming the luxury market in 2019, down 5.3% year-to-date, versus a luxury sales decline of 1.3%. Kerrigan Advisors expects Audi’s expensive facility requirements, as well as declines in dealer profitability are the primary reasons for the negative sentiment.

- In the third quarter, buy/sell activity picked up with 59 transactions closing, as compared to an average of 51 transactions for the first two quarters of the year.

- The average dealer is tracking to an impressive 9.3% earnings increase and is approaching 2015’s peak profit level of $1.5M, on an annualized basis. 

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• - 86% of dealers expect the valuation of their dealerships to increase or remain the same in the next 12 months according to the 2019 Kerrigan Dealer Survey results released in October.  

- Dealers have successfully shifted their focus from new vehicle sales (5.4% average gross margin) to used vehicle sales (11.4% average gross margin), resulting in improved dealership profits, despite declining new vehicle sales. The average dealer is approaching a 1:1 used to new vehicle ratio, having increased the used to new ratio by 9.8% since 2018.

- On average, dealers saw fixed operations revenue grow 5.1% through the third quarter of 2019.  As a result, fixed absorption (service and parts gross profit as a percentage of total fixed overhead expense) increased to the highest level since 2010. Today, dealers are less reliant on the new vehicle department to cover the costs of running their business.

- The fastest growing auto retail groups have greater than 11 dealerships, while those groups with fewer than five dealerships are on the decline. As the auto retail industry evolves, scale will be a key differentiator and size could be the biggest driver of success.

The Blue Sky Report®, published by Kerrigan Advisors, is the auto retail industry's most comprehensive and authoritative quarterly report on dealership M&A activity, as well as franchise values. It includes analysis of all transaction activity for the year, and lays out the high, average and low blue sky multiples for each franchise in luxury and non-luxury segments. For more details and to preview the report, click here.

Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report® which includes Kerrigan Advisors’ signature blue sky charts, multiples, and analysis for each franchise in the luxury and non-luxury segments. The company also releases monthly The Kerrigan Index™, composed of the seven publicly traded auto retail companies with operations focused on the US market.  The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here.

Erin Kerrigan (www.kerriganadvisors.com/meet-the-team/) is Founder and Managing Director of Kerrigan Advisors, and is a recognized industry expert on dealership valuation, real estate and buy/sells. A sought-after commentator on automotive retailing topics ranging from consumer auto buying trends to auto retail consolidation to private equity in auto retail, she has keynoted numerous automotive conferences and her analysis has appeared in publications such as Automotive News, CNBC.com, The Economist and the Wall Street Journal. For a recent video of Erin’s commentary on the market, click here (https://www.youtube.com/watch?v=gPrMMtRF-IU&feature=youtu.be).

Ryan Kerrigan (www.kerriganadvisors.com/meet-the-team/)is Managing Director of Kerrigan Advisors and an expert on US auto retail buy/sells and capital-raising transaction work.  Prior, Ryan served as Managing Director at Serent Capital, a $250mm private equity fund investing in middle market companies and served as General Manager of his family’s auto dealership. Mr. Kerrigan began his career as a management consultant at McKinsey & Company, where he advised Fortune 500 companies on growth strategies, organizational issues, pricing and business valuation.

About Kerrigan Advisors

Kerrigan Advisors is the leading sell-side advisor and thought partner to auto dealers nationwide.  The firm advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses.  Kerrigan Advisors has represented on auto retail’s largest transactions, including five of the Top 100 Dealership Groups in the US, more than any other firm in the industry. Led by a team of veteran industry experts, the firm does not take listings, rather develops a customized approach for each client to achieve their goals. In addition to Kerrigan Advisors’ sell-side advisory and capital-raising services, the firm also provides a suite of consulting services including growth strategies, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate due diligence.

Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report of dealership buy/sell activity and franchise values, received by over 9,000 industry recipients in 35 countries.  To access The Blue Sky Report®, click here (https://www.kerriganadvisors.com/the-blue-sky-report-a-kerrigan-quarterly-third-quarter-2019-preview/) Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly report tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here (http://www.kerriganadvisors.com/the-kerrigan-index/)

Kerrigan Advisors’ Founder and Managing Director, Erin Kerrigan, is a recognized expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, Automotive News’ Canadian World Congress, AICPA, and NADC. She has also been quoted numerous times by the Wall Street Journal, CNBC, Bloomberg and The Economist and has been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Bank of America, Ohio Automobile Dealer Association, and SunTrust Bank. Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News.

Kerrigan Advisors Media Contact:
Melanie Webber, 424.603.4340 / melanie@mwebbcom.com, mWEBB Communications

Kerrigan Advisors Represents on the Sale of Bredemann Lexus - The 3rd Lexus Dealership Sold by Kerrigan Advisors in 2019

Bredemann Lexus sold to Fields Automotive Group

Irvine, CA, November 25, 2019 – Kerrigan Advisors, one of the leading sell-side advisory firms to auto dealers in the US, represented and advised Bredemann Lexus, located in Glenview, Illinois in its sale on November 18, 2019.  The buyer is Glencoe, Illinois-based Fields Automotive Group, ranked number 27 in Automotive News’ Top 150 Dealership Group List. Opened in 1990, Bredemann Lexus is one of the first Lexus franchises in the US and an award-winning dealership, receiving the Elite of Lexus Award 23 consecutive years from 1992 to 2015.   

“It’s never easy to decide to sell a dealership, especially one with such a long family history in the community,” said Joe Bredemann, dealer and co-owner of Bredemann Lexus and grandson of the Bredemann auto group founder, Joseph J. Bredemann II. “Joseph J. Bredemann II, a former blacksmith and wagon-maker, started working in the car business for the Busse Family in Park Ridge almost 100 years ago.  Buick was established in 1912, and we added the Toyota franchise in 1976, and Ford in Glenview in 1990.  That same year, we were proud to be awarded one of the first Lexus franchises in the US.  We will continue to provide the same high level of service to our valued clients at our three remaining dealerships, Bredemann Toyota in Park Ridge, Bredemann Chevrolet in Park Ridge, and Bredemann Ford in Glenview. I’d like to thank Kerrigan Advisors for doing an exceptional job managing a competitive national sale process on our behalf, ultimately leading to our successful sale to Fields Automotive, another Chicago-based, family-owned group. We are confident the Fields management team, together with our former Lexus employees, will continue to provide the same level of unparalleled customer service that our Lexus clients have become accustomed to. We also could not be more impressed with the professionalism and diligence of Kerrigan Advisors.”

This sale marks the 82nd dealership sale Kerrigan Advisors has represented since 2015, and the 3rd Lexus franchise sold in 2019. Kerrigan Advisors is the most active sell-side advisor in the auto retail industry.  The firm actively manages each client’s sale process from beginning to success, leveraging its expansive network of industry contacts to identify the best buyer for its clients’ businesses, ensuring its clients’ financial and personal goals are met.

“The Bredemann family has been an important employer and contributor in Chicago and the northern suburbs for over 150 years. Their Lexus franchise has been award-winning since its start, so we were honored to represent the dealership in the sale,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “The Bredemann name, and their auto dealerships, symbolize integrity, fairness, philanthropy and first-class service. Finding a buyer with the same values who would carry on the Bredemann family legacy was an important goal of our sale process.”

Through four generations, Bredemanns have served their community, with long-standing support to local charities and civic organizations, including Misericordia, the Park Ridge Rotary Club, The Juvenile Diabetes Research Foundation, The A.C. Nielsen Tennis Tournament benefitting the North Suburban Special Recreation Association, North Shore Community Services, Park Ridge Little League Baseball and the Park Ridge, Glenview and Niles Chambers of Commerce.

“The Bredemann Family of Dealerships is one of Chicago’s most reputable,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “They have a policy of service excellence in all aspects of their operations, and a sincere commitment to their community. We’re honored to have represented Bredemann Lexus in this important transaction.”

William Kelly and Ira Levin of Burke, Warren, Mackay & Serritella, P.C. served as legal counsel to the seller.  John J. Keating of Wipfli LLP served as accounting advisor to the seller.  Stephen Dietrich and Sarah Seedig of Holland & Knight LLP served as legal counsel to the buyer.

About Kerrigan Advisors

Kerrigan Advisors is the leading sell-side advisor and thought partner to auto dealers nationwide.  The firm advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses.  Kerrigan Advisors has represented on auto retail’s largest transactions, including five of the Top 100 Dealership Groups in the US, more than any other firm in the industry. Led by a team of veteran industry experts, the firm does not take listings, rather develops a customized approach for each client to achieve their goals. In addition to Kerrigan Advisors’ sell-side advisory and capital-raising services, the firm also provides a suite of consulting services including growth strategies, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate due diligence.

Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report of dealership buy/sell activity and franchise values, received by over 9,000 industry recipients in 35 countries.  To access The Blue Sky Report®, click here Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly report tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here.

Kerrigan Advisors’ Founder and Managing Director, Erin Kerrigan, is a recognized expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, Automotive News’ Canadian World Congress, AICPA, and NADC. She has also been quoted numerous times by the Wall Street Journal, CNBC, Bloomberg and The Economist and has been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Bank of America, Ohio Automobile Dealer Association, and SunTrust Bank. Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News.

Kerrigan Advisors Media Contact:
Melanie Webber (melanie@mwebbcom.com), mWEBB Communications, 949-307-1723