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

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

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.

•  
• - 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.

•  
•  
•  
•  
•  
•  
•  
•  
•  
•  
• - 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. 

•  
•  
•  
•  
• - 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

Longtime area dealer sells successful dealership to Maroone USA, Serra Automotive and Pat Grooms

Irvine, CA, October 2, 2019 – Kerrigan Advisors, a leading sell-side advisory firm to auto dealers in the U.S., represented and advised owner Mike Peebles in his recent sale of Longmont Ford, one of the most successful Ford stores in the Metro Denver area. The buyers are a partnership between Maroone USA, owned by Mike Maroone, former President and Chief Operating Officer of AutoNation, Serra Automotive, and Pat Grooms, who will become President and Operating Partner of Longmont Ford after having served as General Manager since 2016.  Peebles will continue to own and operate his other Ford dealership, Columbine Ford in Rifle, Colorado.

When Peebles acquired Longmont Ford, originally Valley Ford, in 2005, he went to work building a reputation of helping Greater Denver Metro drivers find the right Ford for their lifestyle and budget. Almost 15 years and one major renovation later, Longmont is the 4th highest volume Ford store in the Metro Denver area with a reputation for exceptional customer service and excellent employee relations.

“Since the day we purchased Longmont Ford, we have worked hard to make it the kind of local store people could count on for an excellent customer experience and a high level of service. We lead by our company motto – High Character, High Results.” said Peebles. “So, when I decided to sell, it was a carefully-considered decision to make sure we left the dealership in the right hands for the community and my employees.  I am pleased Mike Maroone and his team will lead Longmont Ford in its next chapter.  I’d like to thank Kerrigan Advisors for guiding us through this process professionally and with such a keen understanding of the buy/sell process.” 

“Advising Mike Peebles on this transaction was a real privilege.  We worked hard to identify the best buyer for his store to ensure he achieved all of his personal and financial goals for the sale,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “Longmont Ford is one of the most successful domestic dealerships in the Denver area.  Maroone USA will continue the dealership’s legacy of top customer service and employee relations.”

As one of the most active sell-side advisors in the auto retail industry, Kerrigan Advisors has represented on the sale of 80 dealerships in the last five years, representing over $1.5 billion in client proceeds. In addition to sell-side advisory work, Kerrigan Advisors offers strategic consulting services to dealers, including growth planning, valuation, capital raising and financial analysis, creating value throughout the auto retail lifecycle. The firm’s full-service approach to dealer advisory has made Kerrigan Advisors the go-to partner for many of auto retail’s leading groups and families.

“It was important that Kerrigan Advisors represent Longmont Ford in the right way and to be sensitive to the strong reputation established by Peebles and his team,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “Mike has a lasting Colorado legacy thanks to this dealership, his Ford store in Rifle, and of course his community philanthropy.” The former Marine has made giving to the community a centerpiece of his work and life, including in his current role as a Crossroads School Board Member.  

“We’re thankful to Kerrigan Advisors for their expert representation during the sale,” said Peebles. “Their assistance was instrumental. In fact, we originally tried to sell the dealership without their guidance – but quickly realized that was a mistake. Their expertise in representing dealers is without question. They do far more than operate as brokers.  They really manage the sale process every step of the way.”  

Kerrigan Advisors does not take listings or build up an inventory of dealerships for sale. The firm focuses on a select number of higher value transactions nationwide, such as Longmont Ford, and ensures that each is completed to their client’s full satisfaction. The firm’s managing directors are fully licensed with FINRA and have specific expertise in navigating the complexities associated with selling large family enterprises with multiple owners and dealerships.

Michael Dommermuth and Randy Earnest of Fairfield and Woods, P.C. served as legal counsel and Tony Allison and Addison Wilk of Crowe LLP served as accounting advisors for Longmont Ford.  Stephen Dietrich and Sandy Lowe served as legal counsel to Maroone USA, Serra Automotive and Pat Grooms.

About Kerrigan Advisors

Kerrigan Advisors is a 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. 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.

Each quarter, Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report and analysis of dealership buy/sell activity and franchise values, received by over 9,000 industry recipients in 35 countries.  The firm also publishes a monthly Kerrigan Auto Retail Index™, the only index tracking the seven publicly traded auto retail stocks.

Kerrigan Advisors’ Founder & 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 been quoted numerous times by the Wall Street Journal and interviewed by The Economist and has been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Bank of America, 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:
mWEBB Communications

Angela Jacobson, angela(at)mwebbcom(dot)com, 714.454.8776
Crystal Hartwell, crystal(at)mwebbcom(dot)com, 714.987.1016

Auto Dealership Buy/Sell Market Activity Up 38% in First Quarter 2019, Trending to Sixth Consecutive 200+ Transaction Year

Buy/sell market shows strong 2019 start with 54 completed transactions in Q1 2019, in spite of new vehicle sales slowdown; stability of dealership profitability and increase in sellers to market contributes to robust transaction activity; peaking real estate values and industry debt levels spike market risk, according to The Blue Sky Report® released by Kerrigan Advisors.

Irvine, CA – June 6, 2019 – The 2019 auto dealership buy/sell market rocketed to a strong start in Q1 2019, with 54 completed transactions, representing a 38.5% increase over Q1 2018, indicating that 2019 is on trend to be the sixth consecutive 200+ transaction year, according to the just-released First Quarter 2019 Blue Sky Report® by Kerrigan Advisors.  In spite of a 3.2% new vehicle sales decline, continued profit stability and an increase in sellers coming to market is contributing to the robust outlook for the buy/sell market.

“As Kerrigan Advisors predicted, 2019 is shaping up to be another solid year for buy/sells and valuations,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors.  “In the face of a decline in new vehicle sales, the diversity of the dealership business model continues to demonstrate its value through its ability to sustain profits. In addition, the influx of older generation sellers coming to market, coupled with private capital jumping into the void left by the publics, all add up to a promising buy/sell year.”

The first three months of the year reflect a shift in industry focus towards used vehicles, finance and insurance (“F&I”), and service and parts. Kerrigan noted that this shift to higher margin profit centers  (used vehicle gross margin is three times that of new vehicles and F&I per new vehicle sold has risen 60% since 2010) is a key reason strategic buyers and outside investors remain interested in auto retail acquisitions, with particular interest in high performing dealerships representing strong franchises in growth markets.  And, with aging dealers increasingly concerned over their ability to succeed in a consolidating, evolving auto retail industry, buyers are facing new opportunities, although increasing industry debt poses a looming risk. 

According to the report, the healthy economy and strong financial markets means there continues to be a high rate of complex multi-dealership transactions.  Among the franchises being acquired, domestics continued to grow their buy/sell market share, while import non-luxury franchises saw their market share decline, primarily driven by Hyundai, Kia, Mazda, Nissan and Volkswagen.  Interest in top domestic franchises, such as Chevrolet and Ford, as well and top non-luxury imports, such as Toyota, Honda and Subaru remain high.

“In the face of all these positives in the market, it must be noted that the outlook is less promising for some players, especially weaker, lower performing franchises with low buyer demand who are finding it more difficult to find a buyer, particularly at a strong price,” noted Ryan Kerrigan, Managing Director of Kerrigan Advisors.  “Another factor to watch is that dealership rents appear to have peaked, with Q1 2019 showing a decline for the first time in 10 years. We expect that many dealers are realizing that their businesses can no longer support these high rent levels and, as rents fall, real estate values often follow.”

The report also highlighted that image upgrades required by OEMs are sending sellers to market, but, because these sellers are unwilling to invest the capital required to become facility-compliant, their dealerships will sell at a lower blue sky value in 2019.

In addition, the report identified the following three trends, which are expected to meaningfully impact the buy/sell market through the remainder of 2019.

• Dealership real estate values start to peak 
• Industry debt levels increase buy/sell market risk
• Auto retail’s lack of a dominant public consolidator opens the door to private capital

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

• 54 dealership transactions were completed, representing a 38.5% increase over the first quarter of 2018.
• Significant increase in used to new sales ratio (.96).  Kerrigan Advisors expects the industry to continue to move towards a 1:1 used to new ratio.
• 14 multi-dealership transactions, representing 26% of the buy/sell market in the first quarter.
• Domestics buy/sell market share increased 5.5% in the first quarter to the highest level in five years.
• US public auto retailers’ acquisition spending in the US decreased 68.6% in the first quarter of 2019 compared to the first quarter of 2018, primarily driven by the downward slide in their stock prices.
• Publics sold 18 franchises, for a net decline of 13 franchises.
• Private buyers acquired 95% of the franchises sold in the first quarter of 2019.
• The average dealership saw a 2.2% decline in rent in the first quarter of 2019.
• Dealership real estate remains auto retail’s most valuable asset class, exceeding blue sky on average by 67.1%.
• Kerrigan Advisors’ assessment of blue sky multiples for Q1 2019 remained relatively stable.
• Kerrigan Advisors downgraded Audi’s high-end multiple from 8.25 to 8.0.
• Kerrigan Advisors upgraded Volvo’s high-end multiple, from 3.5 to 4.0

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: www.youtube.com/watch?v=gPrMMtRF-IU&feature=youtu.be.

Ryan Kerrigan 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 dealership buy/sell advisory firm focused exclusively on providing a high level of client service to dealers nationwide. Led by a team of veteran industry experts, Kerrigan Advisors customizes each sale process to maximize the seller’s transaction proceeds. The firm has sold 79 dealerships in the last five years, including five of the Top 100 Dealership Groups in the US. With the most comprehensive buyer database in the industry, Kerrigan Advisors has the industry context and expertise to match every seller with the right buyer. In addition to Kerrigan Advisors’ buy/sell and capital-raising transaction work, 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 .

In addition to the monthly Kerrigan Auto Retail Index™, each quarter, Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report and analysis of dealership buy/sell activity and franchise values, received by over 9,000 industry recipients in 35 countries.  Kerrigan Advisors’ Founder & 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 and interviewed by The Economist and has been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, 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(at)mwebbcom(dot)com, mWEBB Communications

Auto Dealership Buy/Sell Transactions Increase 20% YOY: 2018 Trending to be Most Active Buy/Sell Market on Record

2018 will be fifth consecutive year of over 200 buy/sells, according to The Blue Sky Report® released by Kerrigan Advisors; strong economy fuels robust market - sellers motivated by high valuations that may not last; increased consolidation, generational transfers and growing pool of investors also heat up market; concerns remain about tariffs’ impact on valuations

Irvine, CA – December 21, 2018 – Automobile buy/sell transactions increased 20% year over year in the third quarter meaning that 2018 will be the fifth consecutive year of over 200 buy/sells – and among the most, if not the most, active years for buy/sells on record - according to the just released The Blue Sky Report’s® Third Quarter Report by Kerrigan Advisors.

Underlying the robust buy/sell market, says the report, is the growing US economy: the average dealership has achieved record sales over the last twelve months.  But, potential future challenges to the economy and auto retail are also impacting the market, driving sellers who are concerned that today’s high valuations may not last into the next year.  These factors, combined with increasing consolidation that promises stiffer competition for smaller players, an increase in generational transfers, and a growing pool of investors, has set the stage for today’s robust buy/sell market.

“With rising interest rates and the changes coming to auto retail, we find sellers more motivated today, concerned that current valuations may not replicate in the future,” said Erin Kerrigan, managing director of Kerrigan Advisors. “And many of these sellers are willing to accept creative transaction structures as part of their exit in order to achieve their valuation goals, a new industry trend and one we expect to continue into 2019.”

“Capital markets are attracted to the sustainability and resilience of the dealership business model, even in the face of a more volatile stock market,” added Ryan Kerrigan, managing director of Kerrigan Advisors. “These investors believe in the business case for consolidation, particularly as technology becomes an increasingly critical part of retailing and scale improves profitability.”

Another force contributing to an active buy/sell market is the generational shift occurring within the dealer body. Much of auto retail is family-owned with most dealers being second generation or greater.  The report notes that an estimated 50% of dealers are currently in the process of transitioning generations – something many will find challenging, particularly since the odds are stacked against them (only 12% of family businesses make it to the third generation and only 3% to the fourth).

The report also notes that the domestics’ share of the buy/sell market increased in Q3 and will dominate 2019’s buy/sell market due to their low blue sky multiples. In addition, high real estate values are, and will continue to be, a value driver of most buy/sell transactions.  Millennials also have a key role to play in future valuations: according to the report, franchises with meaningful millennial market share are well positioned for future higher valuations.  The report’s bullish view of the market, however, is tempered by some concerns over the potential impact of higher interest rates and proposed tariffs.

“High import tariffs should be of great concern to auto dealers as they will have a negative impact on auto sales and franchise values,” continued Erin Kerrigan.  “Buyers will be unwilling to pay current blue sky multiples as earnings growth prospects turn negative. We can see no positive outcome from auto tariffs and encourage all industry participants to employ their political capital to ensure these tariffs are not implemented.”

The Blue Sky Report, published by Kerrigan Advisors, is the auto 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 quarter, and lays out the high, average and low blue sky multiples for each franchise in luxury and non-luxury segments.

Key Highlights from the Blue Sky Report Q3 2018 Report include:

• - 179 dealership buy/sell transactions were completed in the first nine months of 2018, according to Kerrigan Advisors’ research and The Banks Report. This compares to 149 transactions in the first nine months of 2017.

- Year to date, domestics’ share of the buy/sell market increased to 52%, up 68% from 2015.

- The publics acquisition spending, year-to-date, declined 24% compared to 2017, although they are on track to spend $802 million on US dealership acquisitions, which would be the third highest year since the recession.

- While the number of smaller dealership groups shrinks, the number of larger dealership groups (greater than nine dealerships) has grown 50% since 2012.

- Private dealership groups continue to represent the largest share of dealership acquirers and are expected to do so for the foreseeable future. Of the estimated 296 franchises which changed hands in the first nine months of the year, 271 were acquired by existing private dealers and new private capital entrants to the market.

- Non-luxury and luxury import franchises saw their market share decline.

- Transaction pricing when including real estate remained at record levels through the third quarter of 2018, though average blue sky is down an estimated 10.3% from its 2015 peak.  This decline in blue sky value is offset by the increase in real estate value.

The report also identifies three trends which are expected to affect the industry for the remainder of the year and into the new year:

- Generational transfers increase the number of sellers coming to market

- A growing pool of financial investors support consolidation and innovation

•  
•  
•  
•  
•  
•  
•  
•  
•  
• - To achieve pricing goals, sellers increasingly accept structured transactions

For more details and to preview 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: www.kerriganadvisors.com/the-kerrigan-index/.

Erin Kerrigan 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: www.youtube.com/watch?v=gPrMMtRF-IU&feature=youtu.be.

Ryan Kerrigan is Managing Director of Kerrigan Advisors and an expert on US auto retail buy-sell 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 the 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 dealership buy/sell advisory firm focused on providing a high level of client service for dealership sellers nationwide. Led by a team of veteran advisors, Kerrigan Advisors customizes each sale process to maximize the seller’s transaction proceeds. The firm has sold 76 dealerships in the last four years, including five of the Top 100 Dealership Groups in the U.S. With the most comprehensive buyer database in the industry, Kerrigan Advisors has the industry context and expertise to match every seller with the right buyer. In addition to Kerrigan Advisors’ buy/sell and capital-raising transaction work, the firm also provides a suite of consulting services including accounting preparation for sale, litigation support, open point applications and transactional due diligence.

In addition to the monthly Kerrigan Auto Retail Index, each quarter, Kerrigan Advisors publishes The Blue Sky Report®, a Kerrigan Quarterly, which is the auto industry's most comprehensive and authoritative quarterly report and analysis of dealership buy/sell activity and franchise values.  Kerrigan Advisors’ Managing Director, Erin Kerrigan, is a recognized industry 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, AICPA, NADC, and Driving Sales’ President’s Club. She has also been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Ohio Automobile Dealer Association, and SunTrust Bank and has led webinars for NADA and Automotive News.  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, among other outlets.

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