Sale of Kia and Hyundai franchises, two of the industry’s strongest non-luxury import brands, in high-growth Charlottesville area, represents 208th dealership sale completed by Kerrigan Advisors

Charlottesville, VA – November 8, 2023 – Kerrigan Advisors, the premier sell-side advisor and thought partner to auto dealers nationwide, represented Charlottesville, Virginia-based Jim Price Auto Group in the sale of Jim Price Hyundai and Price Kia to Winston-Salem, North Carolina-based Flow Automotive, which owns dealerships across North Carolina and Charlottesville. Since the firm’s founding, Kerrigan Advisors has sold over 225 dealerships. In 2023 alone, the firm is on track to sell 52 dealerships representing $2.6 billion in client proceeds, making Kerrigan Advisors the leading sell-side advisor in auto retail.

“We were proud to represent Jim Price Auto Group in this transaction, and were determined to live up to their over 50-year legacy of providing exceptional service to the Charlottesville community,” said Gabe Robleto, Vice President, Sell Side Advisory at Kerrigan Advisors. “With these two highly sought-after brands in a business-friendly state, we knew buyer demand would be high and a successful sale would be defined by finding a buyer with a track record of commitment to customer service and community, and who knew and understood this region. Flow Automotive, with multiple dealerships in Charlottesville, proved to be a natural fit.”

The Jim Price Auto Group, a family-run dealership group, was founded in 1968 by Henry James "Jim" Price in Charlottesville. In 2017, his daughter Sandra Price Amato became the dealer principal, continuing the family’s legacy as one of Charlottesville’s top dealer groups. In 2022, Jim Price Auto Group was named the #1 New Car Dealership Group in Charlottesville for the second consecutive year.

“After 55 years of doing business in this incredible community, this was a big decision for our family and could only be made with confidence if we knew we were transitioning our dealerships in a way that would serve family, employees and community alike,” said Sandra Price Amato, Owner and Dealer Principal of Jim Price Auto Group. “The team at Kerrigan Advisors was with us every step of the way to ensure any transaction hurdles were overcome and that our family achieved our personal and financial goals in the sale. Simply stated, Kerrigan Advisors was exemplary and, with Gabe Robleto in the lead, not only did we exceed valuation expectations, but the navigation of the entire transaction was successful for everyone involved.”

Echoing that, Sandy Fewell, Partner & Chief Operating Officer of Jim Price Auto Group said: “I am so happy to see our Kia and Hyundai dealerships go to a buyer who has the same core values of taking care of employees and customers that Jim Price Auto Group has demonstrated for over half a century. Thank you Kerrigan Advisors for shepherding the process from beginning to a successful closing.”

Kia and Hyundai are among the top brands in the industry: in 2022, Kia and Hyundai gained the most market share of all import non-luxury franchises, increasing 15.5% and 14.6%, respectively. Kia and Hyundai were also the top performers in the 2023 Kerrigan Dealer Survey for expected valuation increases. Meanwhile, Charlottesville is a growing, affluent market anchored by the University of Virginia, with an attractive cost of living and a highly educated workforce. The area boasts high quality of life, high median household incomes and low cost of living and, in 2023, Virginia ranked as the #2 Top State for Business by CNBC, while Charlottesville was recognized on the Top 100 Best Places to Live in America by Livability.com.  

“In spite of continuing economic uncertainties, today’s dealership buy/sell market remains robust, especially in growing population centers like Charlottesville and business-friendly states like Virginia,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “This transaction, and its high valuation, demonstrate the value buyers see in leading franchises in growing markets -- in this case, further bolstered by Charlottesville’s position as a single point market. We were so honored to work with the Price family to bring this transaction to fruition after over 50 years of hard work and investment in their community, employees and customers.”

Barrett Charapp Beaty of Mahdavi Bacon Halfhill & Young, PLLC served as legal counsel to Jim Price. William Joyner III and Michael Grace of Kilpatrick Townsend & Stockton LLP served as legal counsel to Flow Automotive Companies.

About Kerrigan Advisors

Kerrigan Advisors is the leading sell-side advisor and thought partner to auto dealers nationwide. Since its founding in 2014, the firm has led the industry with the sale of over 225 dealerships representing more than $7 billion in client proceeds, including the third largest transaction in auto retail history – the sale of Jim Koons Automotive Companies to Asbury Automotive Group. 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. Led by a team of veteran industry experts with backgrounds in investment banking, private equity, accounting, finance and real estate, Kerrigan Advisors does not take listings, rather they develop a customized sales approach for each client to achieve their personal and financial goals. In addition to the firm’s sell-side advisory services, Kerrigan Advisors also provides a suite of consulting and investor services including growth strategy, market valuation assessments, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate due diligence.

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. To read the 2023 Kerrigan Dealer Survey, click here. To read the 2023 Kerrigan OEM Survey, click here. Kerrigan Advisors also is the co-author of NADA’s Guide to Buying and Selling a Dealership.

Kerrigan Advisors Media Contact:

Melanie Webber (melanie@mwebbcom.com), mWEBB Communications, 949-307-1723

In spite of a generally positive outlook, more dealers expect valuations and profits to decline than in 2023; Kia projected to have highest valuation increase, while Toyota is the franchise most trusted by dealers, according to the recently released 2023 Kerrigan Dealer Survey

Incline Village, NV – November 6, 2023 – Auto dealers remain generally positive about the valuation of their dealerships over the next twelve months, according to the newly released 2023 Kerrigan Dealer Survey, with 52% expecting 2023’s strong valuations to extend into 2024, and 21% projecting a valuation increase. But, as dealers anticipate that earnings will start to normalize from record-high levels - 38% expect profits to decrease over the next 12 months – more dealers (27%) are also expecting valuations to decrease, the highest level since the survey’s inception in 2019, and almost double 2019 and 2020’s levels.

This has led to an increase in the number (albeit a small number at 6%) of dealers who say they will sell their dealerships over the next 12 months versus 2023. That being said, nearly half (47%) of dealers surveyed are looking to acquire one or more dealerships, leveraging their significant capital accounts resulting from more than three years of record profits. Kerrigan Advisors estimates the industry has amassed over $200 billion in pre-tax profits since 2020.

“The majority of dealers remain bullish on the industry, with 62% or more expecting earnings and valuations to remain at or near peak levels. This positive sentiment is leading nearly half of all dealers to seek acquisitions and expansion, certainly an endorsement of the industry’s future.” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “Dealerships remain one of the most lucrative investments dealers can make in the private sector with an average return on equity of 33% in 2023 – those returns far surpass alternative investment opportunities in the market. As a result, it is not surprising dealers are seeking to allocate their capital to dealership acquisitions even in today’s high interest rate environment.”

The 2023 Kerrigan Dealer Survey queried over 650 auto dealers about their views on the future value of their businesses, as well as their perspectives on franchise valuations and acquisitions, with the results illustrating the changing auto retail environment and dealership relationships with OEMs. The survey revealed distinctly varying views on specific franchises, with some OEMs eliciting a lack of trust and confidence in future franchise profits, while others earned a high level of trust and a positive profit outlook.

Kia, Hyundai, Lexus, Toyota and Porsche were the franchises with the highest expected valuation gains. Dealers were most bullish about Kia, with 44% expecting its valuations to increase, more than double the industry average. Hyundai was second with 37% expecting valuation increases. This marks the second year Kia and Hyundai have exceeded Toyota to top the valuation growth expectation list.   

While the majority of dealers surveyed believe individual franchises will either increase or remain the same in value over the next 12 months, every franchise saw a reduction in the percentage of dealers projecting an increase, along with a rise in those expecting a value decline. “We believe this is emblematic of the rising discontent within the dealer body regarding OEMs’ electric vehicle (“EV”) strategies and the increasing EV inventories on many dealers’ lots,” said Kerrigan.

Dealers, however, are less worried about the effects of planned OEM changes to the dealer model in 2024 than they were for 2023: nearly every franchise saw a rise in the percentage expecting no impact on profitability as a result. “Dealers are skeptical about the OEMs' ability to execute on their proposed retailing changes and aggressive EV strategies, particularly given weak consumer demand for EVs,” continued Kerrigan.

Dealers were also asked about how much they trust the franchise OEMs. Toyota received by far the top results, with 72% of dealers expressing a high level of trust in the franchise, over three times higher than the survey average. By contrast, 48% of dealers reported they had no trust in Ford, which is consistent with the expectation of a decline in future Ford dealer profits due to changes to the OEM’s retailing strategy.

“The data on trust was quite noteworthy, again echoing dealers’ sentiment about changes to OEM retailing strategies,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “It comes as no surprise that Toyota is the franchise that dealers trust the most, a reflection of its thoughtful approach to the rollout of EVs, and its win-win strategy when it comes to the dealer/OEM relationship.”

Based on the overall survey results, Kerrigan Advisors believes there is slightly more risk to valuations and the buy/sell market going into 2024, though transaction activity is expected to remain elevated as dealers with full coffers seek to add scale to their business and deploy their capital to expansion. And, in spite of industry noise about the disruption of OEM retailing changes, those changes are not expected to have a significant impact on future retail profits. 

Notable changes in franchises' expected valuations from the 2023 Kerrigan Dealer Survey:

·       CDJR saw a 29-percentage point increase in dealers expecting the franchise to decline in value versus last year’s survey. Kerrigan Advisors believes this negative dealer sentiment is reflective of CDJR’s rising inventory levels and lack of incentive spending.

·       Ford joins Lincoln as the two franchises least expected to see a rise in valuation, and Ford is the least trusted franchise amongst all OEMs, with 48% of dealers reporting no trust in the OEM. Kerrigan Advisors expects this negative sentiment will impact Ford’s blue sky multiples in 2024 and beyond.

·       Kia surpassed Toyota for the second year in a row as the franchise most expected to increase in value over the next 12 months. Kia also saw one of the largest increases in positive profit expectations as a result of OEM retailing changes and is ranked the 8th most trusted franchise. These positive results are consistent with Kerrigan Advisors’ upgrade of Kia’s franchise multiple in the second quarter of 2023 and positive outlook for 2024.

·       Toyota continues to outperform on every level. Its lead in the trust equation has resulted in the franchise having the highest expected increase in profits as a result of the OEMs’ retailing changes and dealers continue to expect the franchise’s value to rise, even though the franchise is currently the most valuable amongst non-luxury makes.

Methodology

The data for The Kerrigan Dealer Survey was gathered from Kerrigan Advisors’ annual survey of auto dealers in conjunction with the issuance of The Blue Sky Report. The Kerrigan Dealer Survey is based on over 650 anonymous responses from franchised auto dealers in Kerrigan Advisors’ proprietary dealer database. Responses were collected from June 2023 to October 2023. 

·       To download the full Kerrigan Dealer Survey report, click here.

·       To download a preview of The Blue Sky Report®, published by Kerrigan Advisors, click here. 

·       To access The Kerrigan Index™, click here.

About Kerrigan Advisors

Kerrigan Advisors is the leading sell-side advisor and thought partner to auto dealers nationwide. Since its founding in 2014, the firm has led the industry with the sale of over 225 dealerships representing more than $7 billion in client proceeds, including the third largest transaction in auto retail history – the sale of Jim Koons Automotive Companies to Asbury Automotive Group. 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. Led by a team of veteran industry experts with backgrounds in investment banking, private equity, accounting, finance and real estate, Kerrigan Advisors does not take listings, rather they develop a customized sales approach for each client to achieve their personal and financial goals. In addition to the firm’s sell-side advisory services, Kerrigan Advisors also provides a suite of consulting and investor services including growth strategy, market valuation assessments, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate due diligence.

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. To read the 2023 Kerrigan Dealer Survey, click here. To read the 2023 Kerrigan OEM Survey, click here. Kerrigan Advisors also is the co-author of NADA’s Guide to Buying and Selling a Dealership.

Kerrigan Advisors Media Contact:

Melanie Webber (melanie@mwebbcom.com), mWEBB Communications, 949-307-1723

Sale of auto retail’s most in-demand franchise represents the 206th dealership sold by Kerrigan Advisors since 2015; transaction demonstrates that buyers continue to exhibit tremendous interest in leading franchises in high-growth markets

TAMPA, FL–October 25, 2023 – Kerrigan Advisors, the premier sell-side advisor and thought partner to auto dealers nationwide, represented Tampa, Florida-based Stadium Toyota, owned by the Parks and Couey families, in its sale to Bradenton, Florida-based Gettel Automotive, the 57th largest US dealership group. The transaction marks the 206th dealership sold by Kerrigan Advisors since 2015, and the 36th Toyota/Lexus dealership. Kerrigan Advisors is the leading advisor to Toyota and Lexus dealers nationwide, on track to sell six more Toyota/Lexus franchises this year, for a total of 42 sold since 2015.

“It was an honor to work with the Parks and Couey families to advise on this once-in-a-lifetime transaction, and to help transition Stadium Toyota into such good hands,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “The dealership’s track record of excellence in Tampa, Florida, one of the highest growth markets in the US, made it particularly important to find a local buyer of integrity and high quality. As the 18th franchise sold by Kerrigan Advisors in Florida since December 2019, we were proud to leverage our vast expertise in this market to achieve a sale that was beneficial for seller, buyer and community alike.”

Ranked within the top 10% of Toyota dealerships in the US, Stadium Toyota boasts multiple awards for sales and service excellence, including being a six-time President’s Cabinet award winner, granted to only 12 out of 1,200 dealerships nationally. The dealership has also been recognized with the Toyota Board of Governors Award, the Customer Relations Excellence Award, the Toyota Service Excellence Award, the Toyota Parts Excellence Award, and the J.D. Power & Associates Outstanding Sales Experience Award. The dealership prioritizes giving back to the community having worked with the United Way, Oneblood, the Spring of Tampa Bay and Toys for Tots.

With a population of 3.2 million, Tampa is the 2nd largest MSA in Florida, the 18th largest in the US by population and ranks as the 4th fastest growing large metro in the Southeast by population. Tampa is one of the most desirable markets in the US, highly ranked for its pro-business climate, quality of life, healthcare, education, growing technology industry and global connectivity. As a result, the area’s economy has grown at a 4.4% compounded average growth rate since 2009. The financial and business services industry is Tampa’s fastest growing sector, as one in four business and information services firms in Florida call Tampa home, and the area is widely considered the “Wall Street of the South.” The area also is undergoing transformative real estate development, with multiple billion dollars being invested across Tampa.

“We're very thankful for everything the greater Tampa community has done to help Stadium Toyota, its employees and customers achieve success, which is why we have always been committed to giving back to our community in every way that we can,” said Ron Parks. “It was so important to us to work with an advisor with deep expertise in our market and the Toyota franchise to ensure we found the right buyer. The Kerrigan team brought that, as well as a keen strategic insight and industry knowledge to identify a buyer who would not only ensure the business continues to thrive under family ownership, but also understands the importance of our Tampa community to that success. We knew Kerrigan Advisors was the best and only choice to represent us in our sale and our experience working with them confirmed our expectations. We are grateful to Kerrigan for identifying Gettel Automotive as our ideal buyer.”

“Ron and I knew the value of our business in our market and we appreciated the depth of understanding that Kerrigan Advisors brought to that assessment, as well as the care and detail they exhibited every step of the way as we navigated through the complexities of the sale,” said Steve Couey. “We can’t imagine going through this process without Kerrigan’s guidance, expertise and advice. The firm’s reputation of being the best in the business was validated with this transaction. Quite simply, Kerrigan Advisors exceeded our expectations, which were already quite high.”

Kerrigan Advisors’ recent Dealer Survey confirms that Toyota reigns head and shoulders above all other franchises in the buy/sell market. Toyota is the most trusted franchise in the industry and the highest demand franchise in the buy/sell market according the firm. In Tampa, Florida, Toyota is the #1 selling brand and Stadium Toyota was one of the last remaining unconsolidated Toyota points in the market, not already owned by a nationally-ranked dealership group. As a result, Stadium Toyota’s franchise value, particularly as compared to its revenue, was record-breaking, according to Kerrigan Advisors.

“Dealers trust Toyota and it shows in the valuations we are seeing for Toyota dealerships. Buyers know that an investment in a Toyota franchise is one that they can count on to produce strong returns for the foreseeable future because they trust the OEM will do the right thing for their dealers,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “With this sale, the buy/sell market’s most dominant franchise, Toyota, met its most in-demand market, Florida, where the dealerships are among the highest volume and most profitable in the nation. It is further evidence that, in today’s uncertain macro climate, buyers are seeking out markets and franchises that provide them with optimal confidence for growth and success. We are grateful for the opportunity to represent Steve and Ron on this valuable transaction and pleased at its very successful outcome. Congratulations to Jim Gettel and Gettle Automotive on this marquee addition to their business,” concluded Ryan Kerrigan.

Kerrigan Advisors is the most active sell-side advisor on larger transactions in the auto retail industry. In 2023 alone, the firm is tracking to sell 52 dealerships representing over $2.6 billion in client proceeds. Kerrigan Advisors attributes its success to its team’s laser focus on fulfilling each client’s personal and professional goals. In addition to its sell-side advisory work, the firm offers strategic consulting services to dealers, their families, and investors, including growth planning, strategy development and acquisition analysis, creating value for clients at every stage of the auto retail lifecycle.

About Kerrigan Advisors

Kerrigan Advisors is the premier 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 some of auto retail’s largest transactions and advised more of the largest dealership groups in the US than any other buy/sell 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 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. To read the 2022 Kerrigan Dealer Survey, click here. To read the 2023 Kerrigan OEM Survey, click here. Kerrigan Advisors also is the co-author of NADA’s Guide to Buying and Selling a Dealership.

Kerrigan Advisors Media Contact:

Melanie Webber (melanie@mwebbcom.com), mWEBB Communications, 949-307-1723

Auto Dealership Buy/Sell Market Defies Interest Rates with Record-Setting Activity and Historically High Valuations Supported by Dealer Liquidity

First half 2023 buy/sell activity increased 26% compared to first half of 2022, resulting in a record 418 completed transactions over a trailing twelve-month period; market on track for a record year driven by resilience of auto retail profits and the strength of the dealership balance sheets, according to the Second Quarter 2023 Blue Sky Report® by Kerrigan Advisors

INCLINE VILLAGE, NV – September 5, 2023 –The auto dealership buy/sell market continues to gain momentum toward a record-breaking year, with 211 transactions completed in the first half of 2023, representing 357 franchises. As reported in the just-released Blue Sky Report® by Kerrigan Advisors, the mid-year 2023 results mean that buy/sell activity has increased 26% since 2022, a rate that exceeds the typical full-year results pre-Covid. There have been a record 418 transactions completed on a trailing 12-month basis, 9% higher than the prior full-year record (2021). 

“This rate of activity in the first half of the year is evidence that the consolidation of auto retail continues unfazed by rising interest rates and economic headwinds,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “More sellers are considering going to market and are requesting valuations to lock in today’s historically high blue sky.”

Kerrigan Advisors’ first annual OEM survey, released in August, found that auto retail’s robust position was in part due to improved inventory efficiency and higher earnings. Executives surveyed expected recent inventory turn rates to continue as a “new normal” of 30 to 60 days of vehicle inventory on dealership lots, far below the prior norm of 60 to 90 days or more. Furthermore, the survey found that 90% of OEM executives do not expect the industry to return to pre-Covid gross profit margins on new vehicles.

According to the Blue Sky Report, dealership earnings remain 3-times higher than the pre-pandemic period, despite declining ~20% since their peak in 2022. Over the last three quarters, the US public dealer groups’ net income has risen 9.5%, due to a 74% increase in profit margins since 2019 and a 33% increase in dealership count. This, along with strong blue sky values, has led to well-capitalized buyers — especially in fast-growing, business-friendly states such as Texas, Florida, South Carolina, North Carolina, Georgia and Arizona. These buyers are thinking big: year-to-date there were 69 multi-dealership transactions in the first half of 2023, representing 33% of the buy/sell market.  

“We are seeing a tremendous amount of interest in top dealership groups in growing markets, like our recent sale of MCE Automotive Group in Greenville, South Carolina – one of the fastest growing markets in the Southeast,” said Kerrigan. “We expect more sizable transactions in growth markets this year, as buyers seek to increase their exposure to expanding population centers and consolidate their regional presence, which is what AutoNation did in purchasing our client the Bob Baker Auto Group in Carlsbad, California.”

The first half of 2023 also saw a significant shift to domestic franchises, making up 58% of the buy/sell market — a 19% increase compared to the full year of 2022. Kerrigan Advisors attributes this move to anticipated changes to the dealership business model, particularly with the aggressive rollout of electric vehicles (EV). According to Kerrigan Advisors’ 2022 Dealer Survey, over 40% of dealers surveyed felt that the majority of domestic franchises would see reduced profitability because of their EV strategies. Despite this, domestics remain underrepresented in the buy/sell market relative to their 66% share of total franchises in the US.

“Many dealers are sensitive to the changing auto retail landscape, and that’s spurring them to seek assistance from our firm to understand what their blue sky value is in today’s fluctuating auto retail market,” said Kerrigan. “Some dealers lack a reliable succession plan and are nearing retirement; most see changes to auto retail as potentially detrimental to their business model, which is prompting more kitchen table discussions around a possible sale.” 

Kerrigan Advisors’ OEM survey supports some of these concerns. Executives surveyed indicated they did not expect EVs to be sold through the negotiated pricing model; 20% expected EVs to be non-negotiable in price and 48% thought some portion of EV sales would include a set pricing model. In addition, 22% of executives surveyed believe the agency sales model will come to the US, with 43% unsure. While Kerrigan concludes that none of these changes are necessarily negative for future profitability, they are significant and will require dealerships to continuously adjust their business model to maintain and grow profits. For some dealers and their offspring, the unknown associated with the future auto retail model is enough for them to decide the time is right to consider a sale.

2023 Buy/Sell Trends

For the second quarter of 2023, Kerrigan Advisors identified the following trends that are expected to impact the buy/sell market for the remainder of the year:

·       Higher interest rates have minimal impact on blue sky values

·       An increasing number of dealers assess business value in consideration of a sale

·       High-levels of key employee compensation increasingly challenges buyers’ proformas

Since March 2022, the Federal Reserve raised interest rates 10 times, resulting in a correlated rise in borrowing costs for dealers and consumers. As such, growing dealership groups are facing higher financing costs and more conservative lending terms on acquisition loans and mortgages, particularly since the failure of Silicon Valley Bank. Interestingly, despite the disruption in the lending community and higher interest rates, the expected concomitant decline in blue sky values and multiples has yet to occur: publics’ blue sky multiples have increased 20% since the first quarter of 2022.

“Rising interest rates usually have a direct negative impact on equity values, including franchise blue sky,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “We think the valuation aberration experienced today is due is the unexpected strength of the industry’s financial performance, especially auto retail’s higher profit margins. This shows the strength and resilience of the dealership business model.”

In addition to the auto retail industry’s strong record of profitability, additional factors such as pent-up consumer demand and newfound OEM inventory discipline are outweighing affordability issues related to rising interest rates. These rising financing costs are not impacting blue sky values because of the strength of the industry’s balance sheet. Auto retail has amassed an estimated $200 billion in pre-tax profits since 2019, because of years of record earnings. Many buyers can, and will, pay for acquisitions with their own capital and not tap into the debt markets for financings, reducing the impact of rising borrowing costs on blue sky values.

Kia and Cadillac Low-End Multiple Upgraded; Cadillac and Honda Outlook Moves to Steady

Kerrigan Advisors raised Kia’s low-end multiple by 0.25, resulting in a revised multiple range of 4.25 to 5.25, and increased Cadillac’s low-end multiple by 0.50, for a new multiple range of 3.00 to 3.50. Said Ryan Kerrigan, Managing Director of Kerrigan Advisors: “Buyer demand for the Kia franchise continues to rise. Kia franchises often trade above our published multiples due to the franchise’s impressive market share in the fastest-growing markets. A key to Kia’s sustained success is that dealer/OEM relations are highly positive, consistently ranking among the top 10 in NADA’s Dealer Attitude Survey.” Kia’s multiple outlook remains positive.

Kerrigan Advisors sees rising buyer interest in Cadillac, as sales per franchise improves, particularly for exclusive dealerships. Cadillac has augmented inventory management 49%, per its inventory efficiency rating by Cloud Theory as of June 2023 — the most of any franchise. Cadillac now ranks 7th among all franchises for inventory turn rates. As a result, Kerrigan Advisors is increasing Cadillac’s blue sky multiple and moving its multiple outlook to steady as the firm continues to monitor the brand’s EV rollout. In addition to changes to Cadillac and Kia, Kerrigan Advisors moved Honda’s multiple outlook to steady from negative after a 23% increase in sales through the first half of 2023. “Honda’s improvement in new vehicle sales, should it continue, could result in a positive outlook for Honda’s blue sky multiple in future quarters,” said Ryan Kerrigan.

Highlights from the Second Quarter 2023 Blue Sky Report® by Kerrigan Advisors include:

·       211 buy/sell transactions were completed through the first half of the year representing 357 franchises, a 26% increase for transactions and 24% increase for franchises sold from the first half of 2022.

·       69 multi-dealership transactions were completed in the first half of 2023, representing 33% of the buy/sell market.

·       58% of 2023’s buy/sell market was domestic franchises, a 19% increase from the full year of 2022.

·       Through the first half of 2023, the US public dealer groups’ new vehicle gross profit margins are 149% higher than pre-Covid levels.

·       Ford has the highest buy/sell market share at 14.8%, largely due to dealers’ concerns over the OEM’s rollout of electric vehicles and potential resulting changes to the business model.

·       92% of the franchises sold in the first half of 2023 were to private buyers who are leading industry consolidation. The largest private groups represented 20% of the buy/sell market, while smaller private groups remained the largest buyers pool at 72%. The US public dealer groups acquired 8% of franchises sold in the first half of 2023.

·       The US public dealer groups’ estimated blended average blue sky multiple has increased 59% in the last four quarters to 4.6x. This is largely due to a 48% uptick in The Kerrigan Index™ since October 2022.

·       Kerrigan Advisors estimates the average dealership group with three dealerships is worth $39 million in blue sky, double the level pre-pandemic.

·       US public dealer groups’ net income has risen 9.5% over the last three quarters, remaining three times higher than 2019.

·       Over 60% of OEM executives expect a new normal of 30-to-60-day inventory turn rates, according to Kerrigan Advisors’ 2023 OEM Survey; improved inventory management is expected to support higher new vehicle gross margins in the near term.

·       90% of OEM executives do not anticipate a return to pre-Covid inventory levels, according to the Kerrigan Advisors’ 2023 OEM Survey.

·       22% of executives surveyed believe the agency sales model will come to the US, with 43% unsure, according to the Kerrigan Advisors’ 2023 OEM Survey.   

·       Since the pandemic, average dealership payroll per employee has risen 46%, which is contributing to challenges in buy/sells as buyers balance their acquisition’s proforma and employee retention post-transaction.

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 11,000 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.

About Kerrigan Advisors 

Kerrigan Advisors is the premier 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. Since the firm’s founding, Kerrigan Advisors has had the honor of representing the industry’s largest transactions, including more Top 150 Dealership Groups 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 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 11,000 industry participants in 35 countries. To register to receive 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 Media Contact:

Melanie Webber (melanie@mwebbcom.com), mWEBB Communications, 949-307-1723

First quarter 2023 completed transactions increase 43% compared to First quarter 2022, resulting in a record 405 transactions over a trailing 12-month period, driven by multi-dealership transactions, an increase in sellers coming to market, and private buyer interest in business-friendly states, according to the First Quarter 2023 Blue Sky Report® by Kerrigan Advisors

Incline Village, NV – June 26, 2023 – The auto dealership buy/sell market outperformed all previous first quarters on record in 2023, launching into the new year at a robust pace that saw 103 transactions completed — a 43% increase over the first quarter of 2022, according to the just-released Blue Sky Report® by Kerrigan Advisors. The first quarter results mean that a record 405 transactions have been completed in the trailing 12 months ending March 2023, an impressive 5.7% increase over 2021’s prior record and an 82% increase over the 2015-2019 pre-pandemic average of 223. This buyer demand was driven by a continuation of historically elevated industry earnings. Despite earnings declines for most dealers in the quarter — and a 25% drop for the publics — they remained well above pre-pandemic levels due, in part, to higher vehicle gross margins and lower operating costs.

“The economic contraction many had expected in 2023, due to rising interest rates and banking turmoil, did not materialize in the first quarter. A favorable combination of sellers coming to a market with strong buyer demand, particularly in growing population centers and business-friendly states, kept the buy/sell market very active,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “While valuations have come down slightly, they aren’t budging in top markets like Texas and Florida.”

Kerrigan Advisors notes that buyer demand for expansion in these high-growth markets may be underpinning the transaction activity. Franchises located in thriving, business-friendly states, such as Texas and Florida, are commanding steep price premiums as buyers anticipate that these states will likely outperform the industry in the event of a national recession. Longer term, buyers are recognizing the compounding impact of annual economic growth driven by net migration and lower taxes.

In addition, the buy/sell market of 2023 has been fueled by an increase in sellers who are seeking to capture today’s historically high dealership and real estate values in advance of a potential recession. “Many dealers who lack a succession plan realize today’s valuations may represent the exit opportunity of a lifetime, and next generation dealers may have also decided to sell due to concern over disruptions from EV adoption and direct-to-consumer OEM sales strategies,” said Erin Kerrigan.

Another significant characteristic of the first quarter was the record 29 multi-dealership transactions, representing 28% of the buy/sell market. Said Kerrigan: “The large number of dealership group sales in the quarter reflects private buyers’ tremendous access to capital, primarily from accumulated cash flow from operations over the last three years. The largest private groups doubled down on acquisitions in the first quarter, commanding 22% of the buy/sell market, as they deployed their capital war chests to expand their businesses geographically and increase scale.”

As private buyers dominated the buy/sell market in the first quarter - the Top 144 Private Dealership Groups collectively acquired a record 37 franchises - spending on US acquisitions by the publics declined 87%, from $606 million in the first quarter of 2022 to $78 million. This was in spite of net income of $1.2 billion in the first quarter of 2023, albeit 25% lower than the first quarter of 2022, but 290% higher than 2019’s quarterly average of $415 million. Volatility in the market, coupled with historically strong earnings, has depressed the publics’ blue sky multiples, limiting their pricing power for US dealership acquisitions. Generally, a public company will not acquire a dealership at a price that results in a dilution to its earnings per share. However, the public dealer groups spent a record $653 million, 38% of allocated capital, on international and affiliated business investments in the first quarter, more than the total amount spent for the full year of 2022, presumably because these investments’ valuations were more attractive.

For the first quarter of 2023, US light vehicle sales for the import luxury segment outperformed the domestic and non-luxury import segment by 85% and 202%, respectively, possibly due to insulation from rising interest rates. Given the limited number of top luxury franchises in the US and the deep pools of capital seeking acquisitions, Kerrigan Advisors expects some of these franchises will see their multiples increase in the coming quarters, should the trend of luxury outperformance continue.

2023 Buy/Sell Trends

For the first quarter of 2023, Kerrigan Advisors identified the following trends that may meaningfully impact the buy/sell market for the remainder of the year:

·       Highest volume franchises continue to command price premiums

·       Rising interest rates and banking sector turmoil increase acquisition financing costs

·       Buyers increasingly expect audited financials for the industry’s largest acquisitions

Ryan Kerrigan, Managing Director of Kerrigan Advisors said: “Consolidators are actively seeking volume franchises, and are willing to pay a significant price premium. Higher volume dealerships usually achieve above-average profit margins because the fixed expenses are much lower relative to revenue, resulting in significantly higher profitability and attractive economies of scale.” Kerrigan Advisors has observed that dealerships with over $100 million in revenue generally report double the operating margins of dealerships with under $50 million in revenue, enabling higher volume dealerships to achieve consistently elevated profit margins. Also, higher volume franchises are considered easier to operate with more margin flexibility and an ability to recruit top managerial talent.

Rising interest rates, meanwhile, are creating consequences for dealers looking to grow through acquisition — especially smaller dealers who rely on local and regional banks. Banks are passing on the rising costs from the FDIC in the form of higher fees and some are limiting their lending terms to be more conservative with their underwriting. Rising borrowing costs for acquisitions could lead to lower blue sky values later this year.

Finally, buyers are increasingly expecting audited financials. While all public auto retailers are required to maintain audited financials, many private dealers are not, because private dealers’ lenders or shareholders have not mandated it. In most industries, once a private company surpasses $200 million in revenue, an audit is either recommended or required. The lack of audited financials even for many of the Top 150 Dealership Groups is an industry anomaly.

Kia Multiple Increases, Moves Ahead of Hyundai; Honda and CDJR Multiples Decrease

For the first quarter of 2023, Kerrigan Advisors increased the blue sky multiple for Kia, now valued slightly above its sister brand, Hyundai. “This is a result of Kia’s continued success increasing sales per franchise to a level that surpasses Honda and Subaru,” said Ryan Kerrigan. “Buyer demand for Kia franchises continues to increase, thanks to rising dealership profitability, excellent dealer relations and reasonable facility requirements.” The blue sky multiple adjustment is also consistent with survey results from the Kerrigan Advisors 2022 Dealer Survey, when Kia was the franchise most expected by dealers to increase in value.  

Kerrigan Advisors reduced Honda’s blue sky multiple on the high-end to 6.0 from 6.25 due to declining buyer demand as a result of market share losses for the franchise. Kerrigan Advisors also reduced Stellantis’ (CDJR) high-end blue sky multiple to 4.0 from 4.25 — a direct result of the OEM’s mismanagement of its supply chain since the second quarter of 2022, resulting in an oversupply of vehicles, particularly expensive trucks. “With this reduction, we are moving the multiple outlook to steady, as it appears CDJR is focused on rectifying the oversupply of vehicles with an increase in targeted incentive spending,” continued Ryan Kerrigan.

Highlights from the Q1 2023 Blue Sky Report® by Kerrigan Advisors include:

·       103 dealership buy/sell transactions were completed in the first quarter, a 43% increase relative to the first quarter of 2022.

·       A record 29 multi-dealership transactions were completed in the first quarter of 2023, representing 28% of the buy/sell market.

·       The Top 144 Private Dealership Groups per Automotive News acquired a record 22% of franchises sold in the first quarter of 2023.

·       Kerrigan Advisors estimates that the Top 150 Dealership Groups collectively earned $48.6 billion pre-tax over the last three years.

·       The public dealer groups’ net income in the first quarter of 2023 of $1.2 billion declined 25% as compared to the first quarter of 2022, but was 290% higher than pre-pandemic, when the average quarterly net income in 2019 was $415 million.

·       Through the first quarter of 2023, the public dealer groups’ spending on US dealership acquisitions declined 87% from 2022 to $78 million, representing just 1% of US franchises acquired during the quarter. 

·       Volatility, combined with a continuation of historically strong earnings, has depressed the public dealer groups’ blue sky multiple, limiting their pricing power for US dealership acquisitions.

·       The public dealer groups spent a total of $653 million on international and affiliated business investments in the first quarter of 2023, more than the total amount spent for the full year of 2022 and a record 38% of capital allocated by the publics during the quarter.

·       Domestic franchises saw their share of the buy/sell market rise, with Ford, Chevrolet. Buick GMC and Stellantis (CJDR) leading the buy/sell market. Domestic dealers sought an exit due to proposed changes to their retail model with the transition to EVs. 

·       Some smaller dealer groups may be selling due to concern about EV adoption and direct-to-consumer OEM retail strategies. They see this as offering lower future profitability.

·       For US light vehicle sales, the import luxury segment outperformed the domestic and non-luxury import segments by 85% and 202%, respectively, in the first quarter.

·       The Kerrigan Index™ decreased 34% to a 27-month low in October 2022 reflecting volatility coupled with a continuation of historically strong earnings.

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 11,000 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.

About Kerrigan Advisors 

Kerrigan Advisors is the premier 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. Since the firm’s founding, Kerrigan Advisors has had the honor of representing the industry’s largest transactions, including more Top 150 Dealership Groups 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 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 11,000 industry participants in 35 countries. To register to receive 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 Media Contact:

Melanie Webber (melanie@mwebbcom.com), mWEBB Communications, 949-307-1723

Completed transactions decline 2.3% for the full year 2022, due to a 41% decline in the fourth quarter 2022 and driven largely by a reduction in public auto retailers’ acquisition spending, according to the 2022 Blue Sky Report® by Kerrigan Advisors; private buyers moved ahead to dominate the 2022 buy/sell market as dealership earnings hit their third consecutive record year  

Incline Village, NV – April 17, 2023 – The auto dealership buy/sell market experienced its second most active buy/sell year ever in 2022, with a 25% increase in transactions in the first three quarters of the year compared to 2021, and a record 845 franchises sold during that period, according to the just-released Blue Sky Report® by Kerrigan Advisors. However, a dramatic decrease in transactions in the fourth quarter led to a 2.3% decline for the year overall. 

In 2022, 374 dealership transactions were completed, compared to 383 in 2021, impacted by a fourth quarter decline in transactions of 41% to 93, compared to 158 in the fourth quarter of 2021. This was largely a result of the public auto retailers’ lowered valuations, which spurred a significant reduction in their acquisition spending in the fourth quarter of 2022.

The publics’ acquisition spending on US dealerships was 79% less in 2022 than in 2021, according to the report, a dramatic about-face from the prior year. They spent $1.9 billion in 2022, $7.1 billion less than in 2021, but still 155% higher than the pre-pandemic average of $740 million. By the third quarter of 2022, the publics’ average blue sky multiple had declined to just 2.9x, a 64% reduction from their peak in Q1 2021. Believing their companies were undervalued by Wall Street, the public auto retailers chose to primarily allocate their capital to acquiring their own stock in 2022 with 51% of their capital going toward stock buybacks, more than double 2021’s level and the highest level in recent history.

“Despite the public auto retailers reduced acquisition spending, the industry still had the second most active buy/sell market ever, with private buyers dominating the market and putting their substantial war chest of capital to work,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “Private dealers’ acquisition activity is a real endorsement of the auto retail business model and systemic of the industry’s strength over the last three years. Even in a rising interest rate environment, dealers voted with their pocketbooks and grew their businesses through acquisition in 2022 and continue to do so in 2023.”

Much of the activity in the 2022 buy/sell market was, again, driven by surging dealership earnings which hit a third consecutive record year. Kerrigan Advisors estimates that average dealership earnings rose 9.0% in 2022 as compared to 2021, ending the year 210% above the pre-pandemic five-year average from 2015-2019.

As the publics’ share of the buy/sell market declined in 2022, private buyers leveraged their strong balance sheets to make substantial acquisitions, rebounding from an all-time low buy/sell market share in 2021 of 71% to 94% in 2022. Multi-dealership transactions, which were particularly impacted by the decline in public acquisition spending, fell 24% in 2022 to 96 compared to 126 in 2021. Nevertheless, this was 67% higher than their pre-pandemic average of 58.

“While the publics ceded buy/sell market share to the private dealership groups in 2022, there is potential that these companies could increase their capital allocation to US dealership acquisitions in 2023,” said Kerrigan, who noted that, in 2023, The Kerrigan Index™ has risen nearly 14% through March, with five of the publics reaching record stock valuations in February.  

“With their tremendous liquidity - a collective $7.6 billion - the publics will continue to focus on acquisitions as a means to grow their top and bottom lines. Assuming the challenges associated with the brewing banking crisis do not extenuate, some of these companies may choose to increase their allocation to dealership acquisitions in 2023.”

2023 Buy/Sell Trends

In the 2022 Annual Report, Kerrigan Advisors identified the following four important trends that are expected to meaningfully impact the market in 2023.

·       Buyers become increasingly selective with their acquisition criteria

·       Blue sky pricing is based on profit projections rather than historical averages

·       As interest rates rise, dealership real estate values may decline in 2023

·       OEMs more aggressively manage their dealership networks

“The biggest trend for the buy/sell market in 2023 is that the ‘cream’ is starting to rise to the top,” said Ryan Kerrigan, Managing Director at Kerrigan Advisors. “The buy/sell market is beginning to diverge into a ‘have and have not’ marketplace, where certain dealerships remain in high demand, commanding tremendous pricing power, while others struggle to identify a buyer.”

According to the report, in 2021 and 2022, dealers were anxious to put their rising pool of capital to work, throwing a wide net when determining which acquisitions met their parameters. But, in 2023, they are more judicious, paying a premium for top franchises in high-growth, business-friendly markets, such as Florida and Texas, while discounting riskier franchises in lower-growth markets, particularly those with low sales volume. Kerrigan Advisors is also seeing a notable migration in buyers’ acquisition preferences to higher volume dealerships due to the economies of scale and projected higher profitability of these stores, a trend noted in the Third Quarter 2022 Blue Sky Report. With just 31% of dealerships selling 750 new vehicles annually on average, Kerrigan Advisors finds high volume dealerships can command premium pricing due to strong buyer demand for these scalable assets.

Honda and CDJR Multiple Decrease, Buick GMC and Cadillac Multiples Could Increase in 2023

Kerrigan Advisors made several adjustments to its blue sky multiples and multiple outlook this quarter, reducing Honda’s high-end multiple by .25. Honda lost significant market share in 2022 - down 26.9%, the largest loss of any non-luxury franchise. Notably, Honda’s sales per franchise fall below Hyundai and Kia for the first time and a decline in buyer demand for the franchise towards the end of last year brought down the multiple. In the case of CDJR, Kerrigan Advisors reduced its multiple on the high and low ends by .25, as the franchise saw inventories rise and sales decline, which is resulting in a reduction in new vehicle gross profits, reduced overall dealer profitability and declining buyer demand.

Kerrigan Advisors saw improvements in the outlook for Buick GMC and Cadillac. Both franchises increased market share and sales per franchise, particularly as they reduced franchise count. With these moves, Kerrigan Advisors observed an increase in buyer demand for the franchises and expects both franchises could see their multiples rise in 2023. In particular, Cadillac had the largest sales per franchise increase of any franchise in 2023 (165 to 240 or 45%), resulting in increased dealer profitability, particularly in major metros where franchise consolidation is meaningful, and with stand-alone franchises, where sales per franchise is even higher than the average.

Highlights from the Q4 2022 Blue Sky Report® by Kerrigan Advisors include:

·       374 dealership transactions were completed for the full year 2022. While this was a 2.3% decline compared to 2021, 2022 remained the second most active buy/sell year on record.

·       93 dealership buy/sell transactions were completed in the fourth quarter, a 41% reduction from the fourth quarter of 2021.

·       Auto retail recorded its third consecutive year of record earnings in 2022, rising an estimated 9% in 2022 as compared to 2021, and ending the year at an all-time high of $4.43 million, 210% above the pre-pandemic five-year average of $1.43 million.

·       The public auto retailers reduced their acquisition spending on US dealerships by 79% in 2022 spending $1.9 billion on the purchase of 52 US dealerships.

·       Multi-dealership transactions fell 24% from 126 in 2021 to 96 in 2022, but were 67% higher than their pre-pandemic average of 57.6 (2015-2019).

·       The average number of franchises sold per multi-dealership transaction declined to 3.4 in 2022, from 4.0 in 2021.

·       The publics’ average blue sky multiple declined to 2.9x by the third quarter of 2022, 40% below the average private blue sky multiple.

·       In 2022, just 21% of the public auto retailers’ capital was allocated towards US dealership acquisitions, less than one-third of 2021’s level, when 64% of their capital was deployed toward US dealership acquisitions.

·       Private buyers’ share of the buy/sell market rebounded to 94% in 2022 from its all-time low of 71% in 2021.

·       Import luxury and non-luxury buy/sell market shares rose to 43% and 18% respectively by the fourth quarter of 2022, while domestic buy/sell market share dropped to just 39%.

·       The Kerrigan Index™ declined 33.4% in 2022, stressed by rising interest rates and recession risks, but rebounded 28.5% through mid-February 2023 with five of six public retailers achieving all-time high stock prices in 2023.

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 11,000 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.

About Kerrigan Advisors 

Kerrigan Advisors is the premier 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. Since the firm’s founding, Kerrigan Advisors has had the honor of representing the industry’s largest transactions, including more Top 150 Dealership Groups 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 11,000 industry participants in 35 countries. To register to receive 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 Media Contact:

Melanie Webber (melanie@mwebbcom.com), mWEBB Communications, 949-307-1723

Sale of Southwest Florida’s top volume Chevrolet dealership marks the 14th Kerrigan-led franchise sale in Florida since 2019, making the firm the most active in the state

April 3, 2023 – Incline Village, NV – Kerrigan Advisors, the premier sell-side advisor and thought partner to auto dealers nationwide, represented the Winton and Denson families in the sale of Estero Bay Chevrolet to Group 1 Automotive (NYSE: GPI). Estero Bay Chevrolet is the top volume Chevrolet dealership in Southwest Florida, Florida’s second fastest growing region by population growth. With the completion of this transaction, Kerrigan Advisors has successfully advised on the sale of 14 Florida franchises since 2019, making the firm the most active auto dealership sell-side advisor in the state.  

In 2007, Charles Winton and his partner, Pat Denson, were selected by General Motors to open Estero Bay Chevrolet in Southwest Florida, one of the most attractive markets in the US. As a result of their leadership, Estero Bay Chevrolet became one of the highest volume dealerships in the area, winning numerous awards from GM and the industry. In addition to being the dominant Chevrolet dealership in Southwest Florida, Estero Bay Chevrolet ranks sixth in the state and 44th in the nation (top 1.5%) by Chevrolet new unit sales. The dealership has won the highly coveted Chevrolet Dealer of the Year award every year since 2018, an honor bestowed on a select number of Chevrolet dealers nationwide. In addition, Estero Bay Chevrolet is also a Carfax top-rated dealer, recently won Consumer Satisfaction Awards from DealerRater, and boasts one of the highest customer ratings with Kelley Blue Book, Cars.com and Dealer Surveys.

“Representing Charles Winton and Pat Denson in this transaction was a true honor for me and my team. Estero Bay is not only an incredibly valuable dealership, it also represents Charles and Pat’s commitment to excellence and investment in their community. Estero’s success is a product of their honorable character and exceptional leadership of their employees and service to their customers,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “Demand for proven, successful dealerships remains strong nationwide, and Estero Bay Chevrolet is a paragon of success in a premier auto sales region: Florida is the top auto retail market, and one of the most attractive states to do business. Charles and Pat built an incredible legacy of success and community service at Estero Bay Chevrolet, and it was a privilege to advise them on this transaction.”

Estero Bay Chevrolet’s focus on customer service includes a commitment to the communities surrounding the dealership, including Naples, Bonita Springs and Fort Myers. Over the years, the dealership has been a proud donor and supporter of the community, offering scholarships to students in need of financial assistance at Florida Gulf Coast University. Winton, a Foundation Fellow and Chair Emeritus of Florida Gulf Coast University Foundation, helps nurture the growth and education of students through The Charles and Melanie Winton Foundation, while Pat and his wife, Brooke Denson, serve as trustees of SWFL Children’s Charities and leaders of the charity’s annual fundraising event, Southwest Florida Wine and Food Fest, which raises funds to improve pediatric health services in the region.

“At an early age, my wife and I were taught the obligation of giving back,” said Charles Winton, President of Estero Bay Chevrolet. “One of the ways we do that is with our support of Florida Gulf Coast University. We believe that education equals hope and opportunity; our success at Estero Bay Chevrolet has helped to build those opportunities for others,” he said. Pat Denson, Managing Partner of Estero Bay Chevrolet said, “Ever since the first shovel hit dirt on the day we began construction, our focus has been to build and operate a first-class, community-focused operation, including our scholarships to Florida Gulf Coast University, and our commitment to SWFL Children’s Charities.”

Winton began his career as an accountant, spending more than a decade working with dealership financials as a CPA, and learning the retail business from “the top down and bottom up,” ultimately being accepted into the General Motors Minority Dealer Development program. The Charles and Melanie Winton Foundation continues to be active in the greater Fort Myers area along with the greater Charlotte, North Carolina market, where Winton will continue to own and operate South Charlotte Chevrolet and Rock Hill Buick GMC dealerships.

 “We were very happy to be represented by Kerrigan Advisors, a firm that clearly shared – and respected – Pat and I’s commitment to performance and professionalism,” said Winton. “Their deep knowledge of the dealership buy/sell market nationwide, their team’s attention to detail, as well as their expertise in shepherding the sales of many high volume, valuable dealerships like Estero Bay Chevrolet, was key to the success of this transaction. We cannot recommend Kerrigan Advisors enough to dealers who are considering a sale and seek a partner to manage that process from beginning to success.”

Florida dealerships are among the highest volume and most profitable in the nation. Average revenue per dealership in Florida is the highest in the US, as the state’s population and economic growth rates have been some of the highest in the nation. Florida is the fifth fastest growing state by population growth and is the fourth best state in the Tax Foundation’s State Business Tax Climate Index for 2022. The state’s robust population growth, opportune tax climate and higher disposable incomes have led Florida dealerships to be some of the highest volume and most profitable in the nation. Southwest Florida is at the leading edge of this growth: The Cape Coral MSA, which makes up 55% of the Southwest Florida region, is the country’s 12th fastest growing MSA; its population is expected to rise 34% and reach more than 1.05M people by 2045.

“The Estero Bay Chevrolet transaction follows a volume trend we began to track in our Third Quarter 2022 Blue Sky Report®,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “Thanks to economies of scale, high volume dealership benefits from sustainable earnings margins. This means that dealerships like Estero Bay Chevrolet — with a well-run operation and a successful high volume strategy — sell at a price premium. This trend is especially relevant in a business-friendly state like Florida.”

Stephen Dietrich of Holland & Knight served as legal counsel to the seller. Buddy Dearman and Thomas England of FORVIS served as the seller’s accountants. Brian Nolen of Nolen PLLC served as legal counsel to the buyer.

Kerrigan Advisors is the most active sell-side advisor on larger transactions in the auto retail industry, achieving the highest sale price per client of any firm over the last five years. The firm attributes its success to its team’s laser-focus on fulfilling each client’s personal and professional goals. 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. To read the 2022 Kerrigan Dealer Survey, click here. Kerrigan Advisors also is the co-author of NADA’s Guide to Buying and Selling a Dealership.

About Kerrigan Advisors

Kerrigan Advisors is the premier 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 some of auto retail’s largest transactions and advised more of the largest dealership groups in the US than any other buy/sell 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 Media Contact:

Melanie Webber (melanie@mwebbcom.com), mWEBB Communications, 949-307-1723

Despite negative economic headlines and a volatile stock market, auto retailers continued their expansion through acquisition, with buy/sells increasing 16% YOY, despite spending pullbacks by public retailers, according to the Second Quarter 2022 Blue Sky Report® by Kerrigan Advisors; as dealer balance sheets flush with cash fueled demand, more private buyers entered the market

Incline Village, NV – August 31, 2022– The auto dealership buy/sell market continued its record-breaking activity despite economic headwinds during the second quarter of 2022, up 16% compared to 2021, according to the just-released Blue Sky Report® by Kerrigan Advisors. There were 167 dealership buy/sell transactions reported in the first half of 2022, resulting in 406 transactions for the trailing twelve months ending June 2022[1] – a new industry high.

In the second quarter of 2022, average dealership blue sky values increased to a new record of $12.1 million, a $5.7 million increase in blue sky value since 2019, largely driven by record dealership earnings: for the 12 months ending June 2022, the average dealership earned an estimated $4.3 million, a 207% increase over the pre-pandemic average.

“Today, dealership balance sheets are flush with cash, with current assets nearly double current liabilities, and debt-to-equity is at historically low levels,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “Despite multiple unknown variables facing auto retail, the majority of dealers are looking to redeploy their tremendous cash flow back into the industry they know and love, resulting in more demand than supply of dealerships on the market today.”

Kerrigan noted that in the first half of 2022 more private buyers came in the market, and although there were more buyers than sellers, the number of sellers was also on the rise. “As the public retailers’ share of the buy/sell market declined, the largest private dealership groups remained focused on growing through acquisition. In fact, the largest private groups increased their share of the buy/sell market to more than double that of the publics.” 

In the first half of 2022, private buyers accounted for 91% of franchises acquired and the top private dealership groups increased their share of the buy/sell market to 23% -- more than double the publics’ share of 9%. That’s a significant change from 2021, when the publics acquired 29% of franchises sold. Kerrigan Advisors believes that the decline in public spending may be attributed to compression of the publics’ stock prices.

International buyers are also on the rise in 2022. Globally, OEMs are rolling out a new retail agency model, where dealers serve as delivery agents for a set fee. In the US, the agency model faces significant scrutiny by many state associations, especially given state franchise laws. As a result, an increasing number of international dealers are seeking to acquire dealerships in the US where they feel their investment has stronger protections.

“The number of transactions completed by internationally-based acquirers is currently tracking to double last year’s volume. These buyers are highly attracted to the US franchise protections and consider a US franchise acquisition a much sounder investment than one in their home country,” continued Kerrigan. “In some cases, international buyers are willing to pay a price premium to enter the US market and are eager to deploy considerable amounts of capital into US dealership acquisitions.”

The Publics Decrease Acquisition Spending

Compared to the first half of 2021, US public auto retailers’ acquisition spending on US dealerships fell 49% and declined to just 9% share of the buy/sell market – a dramatic reversal from 2021 when the publics dominated the buy/sell market.

“The decline in the publics’ spending could be due to compression of their stock prices,” continued Kerrigan. “They allocated the majority of their capital to stock buybacks, rather than acquisitions in the first half of 2022, which was a reversal of their capital allocation in the first half of 2021.” During the first half of 2022, the six public auto retailers spent more than $2.2 billion on stock buybacks – a 97% increase over the first half of 2021.

Second Quarter 2022 Buy/Sell Trends

Kerrigan Advisors has identified the following three trends which it expects to meaningfully impact the buy/sell market for the remainder of 2022:

·        Blue sky values become harder to assess as record earnings continue for third consecutive year

·        Impact of rising interest rates begins to affect commercial real estate values

·        International dealers increasingly seek US dealership acquisitions due to strength of franchise laws

Kia / Hyundai Franchise Demand; Ford Dealer Skepticism

While Kerrigan Advisors made no adjustments to its blue sky multiples for Q2 2022, the firm upgraded the multiple outlooks for Kia and Hyundai. “During the quarter, we saw a substantial increase in demand for Kia and Hyundai franchises,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “Both franchises outperform the market in sales and earnings growth, and dealers are particularly satisfied with their product portfolios. Our expectation is that their multiples will increase in coming quarters if this trend continues.”

During the quarter, Kerrigan Advisors also noted a rise in Ford dealers considering a sale of their franchises. Early results from the 2022 Kerrigan Dealer Survey, which will be published in October, reflect an expectation that the Ford franchise will decline in value over the next 12 months. “We believe that this negative sentiment is a result of the announced changes to the Ford franchise model, particularly with electrification, and a growing distrust of the OEM’s plans for future dealership profitability,” continued Ryan Kerrigan. 

Highlights from the Q2 2022 Blue Sky Report® by Kerrigan Advisors include:

·        167 dealership buy/sell transactions reported in the first half of 2022 resulting in 406 transactions for the twelve months ending June 2022.

·        In the second quarter of 2022, average dealership blue sky value increased to a new record of $12.1 million, a $5.7 million increase in blue sky value since 2019.

·        42 multi-dealership transactions, representing 25% of the buy/sell market, closed in the first half of 2022, a decline of 18% relative to 2021. Kerrigan Advisors attributes the decline in multi-dealership transactions to rising interest rates and valuation declines in the stock market.

·        Private buyers acquired 91% of franchises sold with the top 144 private dealership groups growing their share of the buy/sell market to 23%, more than double that of the publics.

·        Domestic franchise share of the buy/sell market remains below 50% and is now 26% below their franchise market share of 66%.

·        Import non-luxury franchises increased their share of the buy/sell market to 39% in the first half of 2022, demonstrating the strength of their business model and profit outlook.

·        Nearly as many Toyota franchises traded hands as Chevrolet, Ford and CJDR, despite having 56% fewer franchises in the market.

·        During the first half of 2022, public auto retailers spent more than $2.2 billion on stock buybacks – a 97% increase over the first half of 2021 and spending on acquisitions declined by 49% compared to the first half of 2021.

·        The Kerrigan Index™ declined 16% year-to-date through July 2022, underperforming the broader market. With lower market capitalizations, acquisitions become more difficult for the publics to justify, in part because fewer are accretive to earnings. 

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 nearly 10,000 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.

About Kerrigan Advisors 

Kerrigan Advisors is the premier 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 had the honor of representing the industry’s largest transactions, including more Top 150 Dealership Groups 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 nearly 10,000 industry participants in 35 countries. To register to receive 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 Media Contact:

Melanie Webber (melanie@mwebbcom.com), mWEBB Communications, 949-307-1723

[1] Source: The Banks Report, Automotive News, Kerrigan Advisors’ Research

Holmes Honda Shreveport and Honda Bossier City sold to Community Auto Group and Mercedes-Benz and Sprinter of Shreveport, Jaguar Land Rover Shreveport and Holmes Volvo Cars of Shreveport sold to Group 1 Automotive

Incline Village, NV – July 13, 2022– Kerrigan Advisors, the premier sell-side advisor and thought partner to auto dealers nationwide, represented Shreveport, Louisiana-based Holmes Auto Family in the sale of Holmes Honda Shreveport and Holmes Honda Bossier City, among the highest volume dealerships in Louisiana, to Houston, Texas-based Community Auto Group, and Mercedes-Benz and Sprinter of Shreveport, Jaguar Land Rover Shreveport and Holmes Volvo Cars of Shreveport to Group 1 Automotive (NYSE: GPI). The sale of the Holmes group marks the 160th dealership sale led by the Kerrigan Advisors team since its founding in 2015. Kerrigan Advisors, which focuses exclusively on sell-side representation, is the most active sell-side advisor on the highest value transactions in the auto retail industry and has advised on the sale of 17 Honda dealerships and 29 multi-dealership transactions since 2015.

“Holmes Auto Family’s dealerships are among the highest performing dealerships in Louisiana, a success that was carefully built by the Holmes family over four generations,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. Holmes Honda Shreveport has consistently been the highest volume dealership in Shreveport and one of the highest volume in the state of Louisiana, while Mercedes-Benz of Shreveport has been one of the top luxury dealerships in the market. “When the family decided that the time was right for a sale, we were honored to assist them in identifying the right buyers to continue their family’s generational legacy in the Shreveport market and appreciated the opportunity to work with Holmes’ exceptional team,” said Kerrigan. “We were pleased to facilitate a seamless transaction with Community Automotive Group and Group 1 Automotive, companies that share Holmes’ dedication to customer service and community outreach.”

Charlton Holmes, President of Holmes Auto Family, has served as the Chairman of the American Honda National Dealer Council and is the third generation of Holmes family members to lead the group, along with his daughter Paige Holmes, Vice President of Holmes Auto Family. “My great-grandfather Claude Holmes opened his first Louisiana dealership in 1937, and every day since my family and I have worked hard to make it easy for our customers to buy a car or get one serviced,” said Charlton Holmes. “That starts with our superlative team and extends to our commitment to give back to local organizations and non-profit groups. After 85 years of Holmes serving the Shreveport community, the time was right to transition our business to new owners, and Kerrigan Advisors proved the ideal advisor to help secure the best possible transaction for our group and family. We were especially impressed with Kerrigan’s deep market insights and expertise in every aspect of the buy/sell process and their team’s commitment to client service throughout the process.”

The transaction occurred in a time of high activity in the buy/sell space, especially regarding import franchises, according to Ryan Kerrigan, Managing Director of Kerrigan Advisors.  

“Import franchises have increased their buy/sell market share to 64% in 2021, a trend that’s particularly pronounced in high demand markets in the Southern US, like the Ark-La-Tex region. These areas are generally more business-friendly and economically robust, resulting in a growing pool of buyers seeking to acquire dealerships in these markets, particularly top import franchises like Honda and Mercedes,” said Ryan Kerrigan. “Holmes Auto Family represented a very strong brand in Louisiana. That made these five dealerships especially attractive. We are proud to have been able to use our extensive market intelligence and analytics to assist the Holmes Auto Family in this transaction and to match them with two buyers who will continue the Holmes track record of success.”  

Kerrigan Advisors is the most active sell-side advisor on larger transactions in the auto retail industry, achieving the highest sale price per client of any firm over the last five years. The firm attributes its success to its team’s laser-focus on fulfilling each client’s personal and professional goals. 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. To read the 2021 Kerrigan Dealer Survey, click here. Kerrigan Advisors also is the co-author of NADA’s Guide to Buying and Selling a Dealership.

About Kerrigan Advisors 

Kerrigan Advisors is the premier 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 had the honor of representing the industry’s largest transactions, including more Top 150 Dealership Groups 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 nearly 10,000 industry participants in 35 countries. To register to receive 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 Media Contact:

Melanie Webber (melanie@mwebbcom.com), mWEBB Communications, 949-307-1723

These are the 12th and 13th Florida dealerships sold by Kerrigan Advisors since 2015, making it the most active sell-side advisor in the state.

Incline Village, NV – July 12, 2022 – Kerrigan Advisors, the premier sell-side advisor and thought partner to auto dealers nationwide, represented Alan Jay Automotive Network in its sale of Alan Jay Toyota in Sebring and Maserati & Alfa Romeo of St. Petersburg in Florida. Alan Jay Toyota was sold to the Doherty Automotive Group of Lakeland, Florida; the Maserati and Alfa Romeo dealerships were sold to Qvale Auto Group of West Palm Beach, Florida.

The sales mark the 156th and 157th dealership sales led by the Kerrigan Advisors team since 2015. Kerrigan Advisors, which focuses exclusively on sell-side representation, is the most active sell-side advisor on the highest value transactions in the auto retail industry, and has advised on the sale of 18 Toyota dealerships in the last seven years, more than any other firm in the industry.

“Throughout this transaction, the Kerrigan Advisors team was professional, diligent, and insightful, always putting our interests front and center,” said Alan Jay Wildstein, Founder, President & CEO of Alan Jay Automotive Network. “For 30 years we’ve operated under a simple philosophy -- treat customers like family. So, I appreciated being represented by a firm who shares that philosophy and who treated us with the same kind of care and dedication.”  

The Alan Jay Automotive Network owns and manages 12 additional locations across 12 automotive brands in Central Florida which they will retain and continue to operate. Since Alan Jay Automotive Network’s founding in 1992, it has contributed to hundreds of events, organizations, fundraisers, and individuals – with special emphasis on philanthropies helping children. This includes the local “Wheels for A's,” promotion, held annually at each of the area's five high schools. In 2020, Founder and CEO Alan Jay Wildstein was honored as Highlands County Philanthropist of the Year; he has also been honored twice as a nominee for the Time Dealer of the Year award and is a past Chairman of the Florida Automobile Dealers Association.

“It was a genuine privilege to represent the Alan Jay Automotive Network in these important transactions,” said Gabe Robleto, Vice President, Sell-Side Advisory of Kerrigan Advisors. “Alan Jay Wildstein’s compassionate philanthropy in the Sebring and St. Petersburg communities, and his dedication to his customers, has created a legacy of commitment and business success that is sure to continue. We’re happy to have helped the Alan Jay team transition these dealerships in a way that will ensure the continuation of their legacy of customer service and community support.”

The transactions are the 12th and 13th Florida dealerships sold by Kerrigan Advisors since 2015, making it the most active advisor in the state. “Florida dealerships are among the highest volume and most profitable in the nation, so it’s no surprise that one out of every 3 buyers in Kerrigan Advisors’ proprietary buyer database is seeking a dealership in Florida. This demand is driven by low regulation, an attractive business climate and incredibly strong population growth,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. Kerrigan noted that blue sky multiples in Florida are one to two turns higher when compared to the published national multiples in The Blue Sky Report® published quarterly by the firm.

According to US Census Bureau data, Florida ranked second, behind Texas, in growth from 2020 – 2021, and had the highest rate of new business openings during that time. US Census Bureau data also ranked the Tampa-St. Petersburg-Clearwater metro area as one of the top ten greatest population growth areas nationwide.

“It is our business to know the buyers who are most interested in our clients and the best match for their personal and financial goals. When you combine these dealerships’ Florida locations with strong brands, and an impressive company like Alan Jay, we had the ingredients for an ideal acquisition opportunity,” continued Kerrigan. “Our team was honored to lead this transaction to a very successful outcome on behalf of Alan and his team.”

Kerrigan Advisors is the most active sell-side advisor on larger transactions in the auto retail industry, achieving the highest sale price per client of any firm over the last five years. The firm attributes its success to its team’s laser-focus on fulfilling each client’s personal and professional goals. 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. To read the 2021 Kerrigan Dealer Survey, click here. Kerrigan Advisors also is the co-author of NADA’s Guide to Buying and Selling a Dealership.

About Kerrigan Advisors

Kerrigan Advisors is the premier 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 some of auto retail’s largest transactions and advised more of the largest dealership groups in the US than any other buy/sell 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 Media Contact:

Melanie Webber (melanie@mwebbcom.com), mWEBB Communications, 949-307-1723