86% of dealers expect dealership values to increase or remain the same over the next 12 months according to the first-ever Kerrigan Advisors Dealer Survey

Irvine, CA, October 21, 2019 – Kerrigan Advisors, the leading sell-side advisor and thought partner to auto dealers in the U.S., today released results from its first annual dealer survey. The firm’s first-ever survey was designed to gauge dealer sentiment about the future value of their businesses, as well as their perspective on franchise valuations. The survey queried 650 franchised auto dealers and found that 86% expect their business’ value to increase or remain the same in the next 12 months. Specifically, 60% of respondents were confident in the stability of their current valuation, while 26% expected their valuation to increase, with only 14% anticipating a decrease.

“These results reflect the strength of the diversified auto retail business model and dealers’ confidence in their ability to remain profitable, despite declines in new vehicle sales,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “This is consistent with Kerrigan Advisors’ most recent assessment of dealership valuations.  In our second quarter 2019 Blue Sky Report®, we noted that blue sky values rose slightly in the first half of the year after three years of declines.” 

“Dealer optimism about their franchise values isn’t a surprise, not when Wall Street analysts see automotive as a hedge against a possible recession,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors.  The Kerrigan Index™, the firm’s index of the seven publicly traded auto retail stocks, is up an impressive 41% year-to-date through September, more than double the S&P 500’s 19% gain this year. “While the news headlines tend to focus on the decline in new vehicle sales, investors are paying more attention to industry profitability, which is growing due to the higher margin parts of the auto retail business model, namely used vehicles and fixed operations.  Earnings growth is what drives valuations higher and that is what we are seeing in the market today.”

While the survey showed that dealers were notably optimistic about their own dealership values over the next 12 months, they also shared opinions about the direction of specific franchise values, pointing out potential winners as well as the franchises they felt would decline in value. For example, Subaru had the highest percentage of dealers anticipating an increase in value at 43%, well ahead of second place Toyota, at 30%. There was also significant consensus among dealers about which brands were likely to decline in value over the next 12 months, with 65% pointing to Infiniti and Nissan, followed by Cadillac at 55%.

The results of the 2019 Kerrigan Dealer Survey correlate strongly with buyer demand for franchises, as demonstrated within Kerrigan Advisors’ Buyer Database. “Not surprisingly, the franchises expected to increase in value are showing strong or rising buyer demand, while franchises expected to decline in value have low or declining buyer demand,” said Erin Kerrigan. As an example, Kerrigan noted that the outlook for Volkswagen’s blue sky multiple in the most recent Blue Sky Report was upgraded to “positive” due to rising buyer demand, meaning the franchise’s blue sky multiple could increase in the next few quarters. This is consistent with the results of The Kerrigan Dealer Survey where Volkswagen ranked 4th most likely to see its value rise in the next 12 months.  

The survey also showed which franchises are expected to have the most stable valuations, namely Honda, Toyota, BMW, Lexus and Mercedes. It’s no surprise that these also happen to be among the most valuable franchises in the industry and are the most consistently profitable. Kerrigan Advisors believes this is primarily due to the stability of their dealer network, high sales per franchise and the strength of their franchise business models.

The top five franchises expected to increase/remain the same/decrease in value over the next 12 months are as follows:

Survey Methodology

Data for The Kerrigan Dealer Survey was gathered through an annual survey of auto dealers in conjunction with issuance of The Blue Sky Report®. The Kerrigan Dealer Survey is based on 650 responses from franchised auto dealers in Kerrigan Advisors’ proprietary database.  Survey responses were collected from June to September 2019.

To download the full Kerrigan Dealer Survey report, click here: https://www.kerriganadvisors.com/the-kerrigan-dealer-survey/

About Kerrigan Advisors

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

In addition to the Kerrigan Dealer Survey, each quarter, Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report of dealership buy/sell activity and franchise values, received by over 9,000 industry recipients in 35 countries.  Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly report tracking the seven publicly traded auto retail companies.  Kerrigan Advisors’ Founder & Managing Director, Erin Kerrigan, is a recognized expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, Automotive News’ Canadian World Congress, AICPA, and NADC. She has also been quoted numerous times by the Wall Street Journal, CNBC, Bloomberg and The Economist and has been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Bank of America, Ohio Automobile Dealer Association, and SunTrust Bank. Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News.

Kerrigan Advisors Media Contact:
mWEBB Communications
Melanie Webber, melanie(at)mwebbcom(dot)com, 424.603.4340
Angela Jacobson, angela(at)mwebbcom(dot)com, 714.454.8776
 

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

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

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

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

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

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

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

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

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

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

About Kerrigan Advisors

Kerrigan Advisors is a leading sell-side advisor and thought partner to auto dealers nationwide.  The firm advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses.  Kerrigan Advisors has represented on auto retail’s largest transactions, including five of the Top 100 Dealership Groups in the US, more than any other firm in the industry. In addition to Kerrigan Advisors’ sell-side advisory and capital raising services, the firm also provides a suite of consulting services including growth strategies, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate due diligence.

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

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

Kerrigan Advisors Media Contact:
mWEBB Communications

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

Auto Dealership Buy/Sell Market Slows Slightly, Still on Pace for Sixth 200+ Transaction Year; Blue Sky Valuations Stabilize with Dealership Earnings Improvement

Buy/sell market continues strong year with 49 completed transactions in Q2 2019; global trade war brings investors to market; dealership business model proves resilience with increased gross profit, according to Q2 2019 The Blue Sky Report® by Kerrigan Advisors

Irvine, CA –September 9th, 2019 – The 2019 auto dealership buy/sell market stayed steady and on course for yet another 200+ transaction year in 2019, with 103 completed transactions year-to-date. According to the just-released Second Quarter 2019 Blue Sky Report® by Kerrigan Advisors, a decline in new vehicle sales spurred dealers to turn to their higher margin business segments, resulting in an increase in gross profit and earnings. 

“The buy/sell market moved at a slower pace during the second quarter,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “Yet even with the second quarter’s decline, 2019 is tracking to be another 200+ transaction year – the sixth consecutive year at this elevated level. Kerrigan Advisors expects transaction activity to remain at today’s elevated pace through the remainder of 2019 and into 2020.”

Kerrigan noted that since 2014, an estimated 1,000 dealers have sold their businesses, representing 12% of the total dealer network. Sellers continue to come to market at a high rate, while the buyer pool grows with new capital seeking investment in auto retail thanks to a diversified and high-margin business model that hedges against an uncertain economy.

Despite recession fears, Kerrigan Advisors expects dealership buy/sell activity to remain strong for the remainder of 2019. “The global trade war has clearly caused uncertainty in the investment community, leading to a flight to higher quality, less risky assets,” said Kerrigan. “Auto retail is emerging as one of those asset classes. High net worth individuals, family offices and Wall Street investors recognize the counter cyclical measures dealers can take to sustain profitability, even when new car sales turn south. Auto retail’s nimble model makes the industry a highly attractive investment in a time of greater economic uncertainty.”

This year’s earnings increase, forecasted in Kerrigan Advisors’ prior Blue Sky Reports, highlights the strength and sustainability of the auto retail business model. The continued shift to higher margin profit centers such as used vehicle sales, F&I, and fixed operations also reflects the reported record earnings in the second quarter by public dealer groups. In their quarterly earnings calls, the groups noted their continued success augmenting new vehicle gross profits with record F&I income per vehicle sold. This is another indication of the industry’s ability to identify growing profit centers despite reduced new vehicle sales and gross margins. Indeed, in the first half of 2019, the industry’s average blue sky value reversed a four-year downward trend, driven by the first increase in average dealership profits since earnings peaked in 2015.

According to the report, in the first half of the year the number of multi-dealership transactions also declined. The rise in single dealership transactions may reflect “franchise pruning” that many organizations are currently undertaking. “Both the public groups and large private dealership groups are capitalizing on their ability to jettison underperforming dealerships and redeploy their capital into higher ROI investments in today’s active buy/sell market,” noted Ryan Kerrigan, Managing Director of Kerrigan Advisors. “Among the franchises being acquired, domestics continue to grow their market share, because buyers are attracted to their lower blue sky multiples and higher expected ROI.”

In addition, the report identified the following three trends, which are expected to meaningfully impact the buy/sell market through the remainder of 2019 and into 2020.

- Improvement in dealership earnings steadies blue sky values
- Publics’ stock price appreciation portends future acquisitions
- Lower interest rates support an active buy/sell market

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

- The buy/sell market moved at a slower pace in the second quarter, with 49 transactions completed.

- The Kerrigan Index™ is up 37.1% through July 2019. Wall Street investors increasingly believe an auto retail investment is a hedge against a potential recession.

- Average dealership earnings increased 1% over the trailing twelve months ending in June 2019, the first increase in dealership earnings since 2015.

- Despite a decline in new vehicle sales, dealers grew their higher margin business segments, resulting in an increase in gross profit and earnings.     

- Since 2014, fixed operations and used vehicle gross profits have increased 10.8% and 27.6%, respectively.  By contrast, new vehicle gross profits have declined 7.6%.

- Today, fixed operations and used vehicles represent 75.9% of the average dealer’s gross profit, while new vehicles represent just 24.1% of gross profits.  

- Domestics continue to increase their share of the buy/sell market at the expense of import non-luxury and import luxury franchises, which both saw their buy/sell market share decline to 22% and 9% respectively in the first half of 2019, the lowest level in five years.   

- Rising real estate prices are increasing the total enterprise value of dealerships and more than offsetting any decline in blue sky value.

- Kerrigan Advisors downgrades Nissan and Infiniti high-end multiples, as the OEM prioritizes volume over dealer profitability and maintains punitive stair step programs that distort vehicle pricing, creating earnings volatility within the dealer network.

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

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

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

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

About Kerrigan Advisors

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

In addition to the monthly Kerrigan Auto Retail Index™, each quarter, Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report and analysis of dealership buy/sell activity and franchise values, received by over 9,000 industry recipients in 35 countries.  Kerrigan Advisors’ Founder & Managing Director, Erin Kerrigan, is a recognized expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, Automotive News’ Canadian World Congress, AICPA, and NADC. She has also been quoted numerous times by the Wall Street Journal and interviewed by The Economist and has been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Ohio Automobile Dealer Association, and SunTrust Bank. Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For more details and to preview the report, click here.

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

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

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

About Kerrigan Advisors

Kerrigan Advisors is the leading dealership buy/sell advisory firm focused exclusively on providing a high level of client service to dealers nationwide. Led by a team of veteran industry experts, Kerrigan Advisors customizes each sale process to maximize the seller’s transaction proceeds. The firm has sold 79 dealerships in the last five years, including five of the Top 100 Dealership Groups in the US. With the most comprehensive buyer database in the industry, Kerrigan Advisors has the industry context and expertise to match every seller with the right buyer. In addition to Kerrigan Advisors’ buy/sell and capital-raising transaction work, the firm also provides a suite of consulting services including growth strategies, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate .

In addition to the monthly Kerrigan Auto Retail Index™, each quarter, Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report and analysis of dealership buy/sell activity and franchise values, received by over 9,000 industry recipients in 35 countries.  Kerrigan Advisors’ Founder & Managing Director, Erin Kerrigan, is a recognized expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, Automotive News’ Canadian World Congress, AICPA, and NADC. She has also been quoted numerous times by the Wall Street Journal and interviewed by The Economist and has been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Ohio Automobile Dealer Association, and SunTrust Bank. Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News.

Kerrigan Advisors Media Contact:
Melanie Webber, 424.603.4340 / melanie(at)mwebbcom(dot)com, mWEBB Communications

Dealership Buy/Sell Market Marked Fifth Consecutive Year of 200+ Transactions in 2018 with Continued Growth Predicted for 2019

2018 transactions increased 6.9% year over year, including record number of multi-dealership transactions; in spite of auto sales downturn, 2019 acquisition market will be robust, with real estate valuations high and private investors seeing key value in Fixed Ops profit centers and improved retail efficiencies, according to The Blue Sky Report® released by Kerrigan Advisors

Irvine, CA – March 19, 2019 – The automobile dealership buy/sell market recorded another year of tremendous activity in 2018, representing a 6.9% growth over 2017, and the fifth consecutive year of over 200 buy/sells, according to the just-released The Blue Sky Report’s® “Year in Review” by Kerrigan Advisors. Two hundred sixteen transactions closed in 2018, including a record number of multi-dealership transactions.  And, according to the report, this five-year streak shows no signs of abating: in spite of an anticipated slump in auto sales and rising interest rates, Kerrigan Advisors predicts that 2019 will be another robust year for buy/sells and valuations.

“The strength of the dealership buy/sell market over the last five years is a testament to the health of the US economy, the financial markets, and most importantly the auto retail industry.  We believe the number of buyers, particularly those backed by professionally managed capital, will increase in 2019,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors.   “Despite rising interest rates and a decline in new vehicle sales, the average auto dealership remains highly profitable and valuable, continuing to appeal to private dealers who comprised the majority of buyers in 2019."

In addition to a strong economy and the ongoing consolidation and innovation opportunities in auto retail, among the key factors Kerrigan Advisors cites for a strong buy/sell market in 2019 are a rise in the number of private investors seeking to put capital into auto retail (year-to-date, the pace of new investors seeking investments in auto retail has risen 59% as compared to 2018); increased dealership gross profit driven by fixed operations (service & parts), as well as dealerships’ historically demonstrated ability to adjust their business model to create new profit opportunities and reduce variable expenses.

“Buyers are looking for higher quality franchises which are more competitive as new vehicle sales decline,” continued Kerrigan.  “These franchises tend to have more fixed operations revenue, which commands a gross profit margin nearly ten times higher than new vehicles and are benefitting from the surge of vehicles entering the “sweet spot” of customer pay post-warranty, more than making up for margin losses from a contracting vehicle market.”

Kerrigan Advisors noted that while overall Blue Sky multiple averages are lower, due to a decline in lower demand franchises, valuations remain strong, although more stores are trading at average, rather than high multiples. Additionally, valuations are being positively influenced by high real estate valuations which are at peak levels and represented the largest portion of a dealership’s value in 2018:  Kerrigan Advisors estimates the average dealership’s real estate value at $11.3 million, up 4.9% from 2017. This shift in dealership transaction values from blue sky to real estate has reduced the equity requirements of the average transaction which, Kerrigan Advisors believes, is one of the reasons buy/sell activity remains so strong.

Domestics continued to show strength in the 2018 buy/sell market, according to the report, exceeding 50% for the first time in the last five years. On the other hand, import luxury franchises’ market share continued to decline, a trend the report says will continue in 2019 as their high multiples will be more difficult to achieve for some buyers. Also contributing is the sensitivity import luxury franchises have to rising interest rates because their high valuations typically require more leverage.  But, although the larger import segment will also see a decline in 2019, Kerrigan Advisors expects the top import non-luxury franchises, namely Toyota, Honda and Subaru, to grow their buy/sell market share in 2019.

“A key trend for 2019 is that the business model of the franchise will determine buyer demand:  as industry sales contract, buyers become more discerning, focusing on high-performing franchises that have attractive, long term investment characteristics and that tend to outperform the industry when sales decline,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors.   “Meanwhile, weaker franchises with challenging dealer business models will see lower buyer demand because today’s buyers are not attracted to franchises with poor dealer relations, highly variable incentive programs, less supportive captive finance companies, low sales per dealership and weak fixed operations.”

The report also identified the following four market trends, which it predicts will meaningfully impact the buy/sell market in 2019 and beyond.

➢ Sellers avoid image upgrades to capitalize on record real estate values

➢ Rising interest rates impact blue sky values

➢ Franchise business models determine buyer demand

➢ Transaction activity increasingly varies by market

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

Key Highlights from the 2018 Full Year Blue Sky Report® include:

• 216 transactions closed, versus 202 in 2017, resulting in a 6.9% increase over 2017.
• Year to date, the pace of new investors seeking investments in auto retail has risen 59% as compared to 2018.  
• The number of multi-dealership transactions reached a record 65 for the full year of 2018, a notable 27.5% increase over 2017’s level.
• Domestics’ share of the buy/sell market rose again in 2018, exceeding 50% for the first time in the last five years.
• Public retailers’ acquisition spending declined in 2018 by 6.6% as compared to 2017.
• Private buyers continue to lead industry consolidation, acquiring 93% of the franchises sold in 2018, about the same level as 2017.
• Dealership real estate represented the largest portion of a dealership’s value in 2018, exceeding blue sky value by 84.2%.
• Public companies are undervalued relative to private dealerships.  Public blue sky multiples now average just 5.1x, only slightly above Kerrigan Advisors’ average blue sky multiples for private dealerships, despite the publics’ liquidity premium.

For more details and to preview the report, click here.

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

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

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

About Kerrigan Advisors

Kerrigan Advisors is the leading dealership buy/sell advisory firm focused exclusively on providing a high level of client service to dealership sellers nationwide. Led by a team of veteran industry experts, Kerrigan Advisors customizes each sale process to maximize the seller’s transaction proceeds. The firm has sold 79 dealerships in the last five years, including five of the Top 100 Dealership Groups in the U.S. With the most comprehensive buyer database in the industry, Kerrigan Advisors has the industry context and expertise to match every seller with the right buyer. In addition to Kerrigan Advisors’ buy/sell and capital-raising transaction work, the firm also provides a suite of consulting services including accounting preparation for sale, litigation support, open point applications and transactional due diligence.

In addition to the monthly Kerrigan Auto Retail Index™, each quarter, Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report and analysis of dealership buy/sell activity and franchise values, received by over 9,000 industry recipients in 35 countries.  Kerrigan Advisors’ Founder & Managing Director, Erin Kerrigan, is a recognized expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, Automotive News’ Canadian World Congress, AICPA, and NADC. She has also been quoted numerous times by the Wall Street Journal and interviewed by The Economist and has been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Ohio Automobile Dealer Association, and SunTrust Bank. Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News.

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

Irvine, CA, -- February 26, 2019 – Kerrigan Advisors, the leading buy/sell advisor to auto dealers in the US, represented and advised Minnesota-based Village Automotive Group in its sale of Lexus of Wayzata, Lexus of Maplewood, and Village Chevrolet, to Chicago-based Ed Napleton Automotive Group, which operates more than 74 franchises in seven states and ranked #26 on Automotive News’ 2018 Top 150 Dealership Group list.

“After 70 years in the auto dealership business, our family’s decision to sell was a difficult one.  We are happy to see Village Automotive Group transition to another family-owned dealership group who will continue our customer service and employee-focused legacy,” said Steve Bloomer, President and CEO of Village Automotive Group.  “We are very grateful for the guidance and support that the Kerrigan Advisors’ team provided us in the sale process.  Erin Kerrigan’s expertise – from her deep understanding of the buy/sell market, transactions and dealership valuations to the OEM approval process – helped make our sale as smooth as possible.”

Founded by the Bloomer family in 1950, Village Automotive Group is one of the original ‘charter’ dealerships for Lexus in the US, has earned the Lexus Elite distinction for a combined 46 years, and operates the only Lexus dealerships in the state of Minnesota.  The company’s Village Chevrolet dealership in Wayzata has been owned and operated by the Bloomer family for nearly 70 years and is one of the oldest Chevrolet dealerships in the state.

“Kerrigan Advisors was invaluable to us in the sale of our dealerships,” continued Steve Bennett, Vice President, COO, and partner of Village Automotive Group, who has been active on Lexus dealer and product councils during his 38-year tenure with the company. “Mercedes Hendricks and Marie Brashears of Kerrigan Advisors were particularly helpful in preparing us for sale and managing the buyer due diligence process. We are very grateful for all of their hard work in making this sale a success.”

The most active sell-side advisor in the auto retail industry, Kerrigan Advisors has represented on the sale of 79 dealerships in the last five years, representing over $1.5 billion in client proceeds. In addition to its sell-side advisory work, Kerrigan Advisors consultancy offers strategic consulting services to dealers and their families, including growth planning, capital raising and valuation analysis, creating value every step of the auto retail lifecycle.  The firm’s full-service approach to dealer advisory has made Kerrigan Advisors the go-to thought partner for many of auto retail’s leading groups and families.

“Two things were clear when we were engaged by Steve Bloomer and Steve Bennett: the importance of selling to a buyer who would continue the Village Automotive Group’s extraordinary record of top customer service and the need for a transaction process that would do justice to the Bloomer family’s 70-year legacy in the automotive retail industry,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors.  “We are pleased that we found a buyer with a deep family legacy in the auto dealership business.  With the acquisition of Village Automotive Group, Napleton is adding a hugely respected group of dealerships, including some of the top Lexus franchises in the U.S., and entering the Minneapolis market for the first time.”

Kerrigan Advisors’ promise to its clients is to treat each sale as if it were their own.  Unlike some firms that simply operate as brokers, Kerrigan Advisors does not take listings or building up an inventory of dealerships for sale, rather the firm focuses on a select number of higher value transactions, such as the sale of Village Automotive Group, and ensures that each is completed to their client’s satisfaction. The firm’s managing directors are fully licensed with FINRA and have particular expertise in navigating the complexities associated with selling large family enterprises with multiple owners and dealerships.

Bill Jonason and Mark Hamel of Dorsey & Whitney LLP served as legal counsel to Village Automotive Group.  Jama Kris of Stinson Leonard Street LLP and Les Stracher served as legal counsel to Ed Napleton Automotive Group.

About Kerrigan Advisors

Kerrigan Advisors is the leading dealership buy/sell advisory firm focused exclusively on providing a high level of client service to dealership sellers nationwide. Led by a team of veteran industry experts, Kerrigan Advisors customizes each sale process to maximize the seller’s transaction proceeds. The firm has sold 79 dealerships in the last five years, including five of the Top 100 Dealership Groups in the U.S. With the most comprehensive buyer database in the industry, Kerrigan Advisors has the industry context and expertise to match every seller with the right buyer. In addition to Kerrigan Advisors’ buy/sell and capital-raising transaction work, the firm also provides a suite of consulting services including accounting preparation for sale, litigation support, open point applications and transactional due diligence.

In addition to the monthly Kerrigan Auto Retail Index™, each quarter, Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report and analysis of dealership buy/sell activity and franchise values, received by over 9,000 industry recipients in 35 countries.  Kerrigan Advisors’ Founder & Managing Director, Erin Kerrigan, is a recognized expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, Automotive News’ Canadian World Congress, AICPA, and NADC. She has also been quoted numerous times by the Wall Street Journal and interviewed by The Economist and has been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Ohio Automobile Dealer Association, and SunTrust Bank. Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News.

Kerrigan Advisors Media Contact:
mWEBB Communications

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

- Generational transfers increase the number of sellers coming to market

- A growing pool of financial investors support consolidation and innovation

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

For more details and to preview report, click here.

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

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

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

About Kerrigan Advisors

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

In addition to the monthly Kerrigan Auto Retail Index, each quarter, Kerrigan Advisors publishes The Blue Sky Report®, a Kerrigan Quarterly, which is the auto industry's most comprehensive and authoritative quarterly report and analysis of dealership buy/sell activity and franchise values.  Kerrigan Advisors’ Managing Director, Erin Kerrigan, is a recognized industry expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, AICPA, NADC, and Driving Sales’ President’s Club. She has also been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Ohio Automobile Dealer Association, and SunTrust Bank and has led webinars for NADA and Automotive News.  Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News, among other outlets.

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

Robleto brings his extensive background in dealership real estate transactions to the most active sell-side advisor in the auto retail industry; new office enables Kerrigan Advisors to better serve its clients across the US

Irvine, CA, -- October 25th, 2018– Kerrigan Advisors, the leading sell-side advisory firm to auto dealers in the US, today announced that it has opened a second office in the Washington DC metro to better serve its client base across the US.  Heading up the new office is automotive retail real estate veteran Gabriel (Gabe) Robleto, who has been named Kerrigan Advisors’ Vice President of Buy/Sell Advisory.  Robleto’s extensive experience in auto retail transactions and dealership real estate will be invaluable to Kerrigan Advisors’ client service, particularly in the Eastern US.

Robleto joins Kerrigan Advisors from Capital Automotive Real Estate Services, Inc. (CARS), where he most recently served as Vice President of Acquisitions.  CARS is the leading real estate finance company focused exclusively on the automotive retail industry with over $5 billion of dealership real estate under management.  Robleto’s new role at Kerrigan Advisors will leverage his expertise in all facets of automotive retail real estate, including due diligence, financing, transactions, lease terms and real estate purchase agreements.

“Gabe’s impressive background in dealership real estate transactions could not be more timely in a buy/sell market where real estate, for most dealers, is their most valuable asset – often exceeding franchise value, and representing an increasingly larger slice of auto retail buy/sell transactions,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors, which has represented on the sale of 72 dealerships in the last three years, making it the most active buy/sell advisor in the auto retail industry.  “We are delighted that Gabe has joined our growing company, enabling us to expand our expertise in dealership real estate and increase our firm’s reach across the US.”

During his ten years at CARS, Robleto underwrote and financed over $300 million of auto dealership real estate in the form of sale leasebacks as part of buy/sell transactions and dealer estate planning.  Additionally, he was responsible for a portfolio of over $1 billion of CARS real estate investments across 18 states, which included leases to both public and privately-held dealer groups.  A graduate of the McIntire School of Commerce at the University of Virginia, Robleto is a frequent guest lecturer within McIntire’s real estate track, one of the top real estate programs in the US.

“As the scope of our business has broadened in a buy/sell market that continues to be robust, the need for a consistent East Coast presence has become clear,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors.  “Our new Washington DC metro office, under Gabe’s leadership, will enable us to be even more hands on with our clients in the Eastern and Southeastern US and to better serve the retail automotive market nationwide.”

“I am delighted to join the Kerrigan Advisors buy/sell advisory team.  There is no other firm in the industry with the expertise, professionalism and, most importantly, track record of success in the dealership buy/sell market,” said Gabe Robleto.  “I look forward to working with our clients on the successful sale of their dealerships.”

Founded in 2015, Kerrigan Advisors has represented transactions totaling over $1.5 billion in automotive retail.  The firm monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report® which includes Kerrigan Advisors’ signature blue sky charts, multiples, and analysis for each franchise in the luxury and non-luxury segments. To download the report, click here. The company also releases monthly The Kerrigan Index™ composed of the seven publicly traded auto retail companies with operations focused on the US market.  The Kerrigan 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 leading dealership sell-side advisory firm focused on providing a high level of client service for dealership sellers nationwide. Led by a team of veteran advisors, Kerrigan Advisors customizes each sale process to maximize the seller’s transaction proceeds. The firm has sold 72 dealerships since 2015, including five of the Top 100 Dealership Groups in the U.S. With the most comprehensive buyer database in the industry, Kerrigan Advisors has the industry context and expertise to match every seller with the right buyer. In addition to Kerrigan Advisors’ sell-side transaction work, the firm also provides a suite of consulting services including accounting preparation for sale, litigation support, open point applications and transactional due diligence.

In addition to the monthly Kerrigan Auto Retail Index, each quarter, Kerrigan Advisors publishes The Blue Sky Report®, a Kerrigan Quarterly, which is the auto industry's most comprehensive and authoritative quarterly report and analysis of dealership buy/sell activity and franchise values.  Kerrigan Advisors’ Managing Director, Erin Kerrigan, is a recognized industry expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, AICPA, NADC, and Driving Sales’ President’s Club. She has also been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Ohio Automobile Dealer Association, and SunTrust Bank and has led webinars for NADA and Automotive News.  Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News, among other outlets.

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

Auto Dealership Buy/Sell Market Picks Up Steam: 2018 On Track for 5th Year of 200+ Acquisitions, According to The Blue Sky Report® released by Kerrigan Advisors

New tax law and economies of scale help publics and consolidators buck trends to grow earnings and fuel Q2 Buy/Sell market to 92% growth over Q1; one-eighth of all auto dealerships have changed hands since 2014 as industry consolidation continues

Irvine, CA – August 29, 2018 – The new tax law and improved economies of scale and scope are among the trends driving a robust Buy/Sell market in Q2, after a slow start to the year, according to The Blue Sky Report’s® Second Quarter Report released by Kerrigan Advisors. 

Seventy-five transactions were completed in Q2, a 92% increase over Q1. With consolidators and publicly-traded auto retailers seeing increased earnings as a result of these factors, profitability at dealerships holding steady, and dealerships embracing innovative, profit-driving business models, Kerrigan Advisors predicts that 2018 will mark the fifth consecutive year to see over 200 transactions.   

 “We estimate one in eight dealerships have changed hands since 2014 and we believe increasing consolidation means this number will only increase,” said Erin Kerrigan, managing director of Kerrigan Advisors.  “Consolidators are leveraging significant opportunities to increase earnings with accretive acquisitions by achieving economies of scale and scope post-transaction.” 

“Consolidators are finding new ways to grow earnings by employing technology and streamlining their business models, changing their selling systems and introducing new products across their platforms, while the ‘to-be-consolidated’ are squeezing more profit out of their existing business models. And both are being positively impacted by reduced taxes as a result of tax reform,” added Ryan Kerrigan, managing director of Kerrigan Advisors.

The Kerrigans, however, did note that while blue sky values remained high in Q2, they were below 2017 levels, partly as a result of rising interest rates and floor plan cost increases.  But, despite a plateauing SAAR, The Kerrigan Index™, which tracks publicly-traded auto retail companies, continues to rise – indicating that Wall Street believes that scale matters and that anticipated disruptions to auto retail will disproportionately benefit the largest dealership groups.  “There is little doubt that size will be a key driver for future success in auto retail,” added Ryan Kerrigan.

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

Key Highlights from the Blue Sky Report Q2 Report include:

• 114 dealership buy/sell transactions were completed in the first half of 2018, compares to 101 transactions in the first half of 2017.
• The number of franchises sold rose 22% over the first half of 2017.
• The number of multi-dealership transactions increased to 33 during the first half of 2018, versus 23 in the first half of 2017. 
• Domestics maintained their leading position, followed by import non-luxury franchises and import luxury franchises.
• The publics are tracking towards nearly $1 billion of US acquisition spending in 2018, a level that would surpass all prior years, except 2014 when Lithia Motors acquired DCH Auto Group.
• Private dealership groups continue to represent the largest share of dealership acquirers.  Only 22 of the estimated 192 franchises that changed hands in the first half of the year, were acquired by public companies. 
• Dealership rents rose as compared to 2017, creating concern: the average dealer now has a rent to gross profit of 11.2%, a 3.7% rise over the 2017 ratio.

The Q2 Report outlines three key trends that Kerrigan Advisors anticipate will have a significant impact on the buy/sell market for the remainder of 2018 and into 2019:

• Consolidators focus on geographic concentration
• Successful business models command higher blue sky values
• Expense reduction becomes a major consolidation driver
• In addition to expense reduction and a focus on geographic concentration, the report emphasizes the importance of successful and innovative business models to increased valuations, citing the recent sale of Wilsonville Toyota and Wilsonville Subaru, both of which effectively utilized a no-negotiation sales model, resulting in profitability far higher than industry standards.

“Buyers of dealerships today are students of auto retail.  Most spend their days and nights thinking of ways to enhance their business’ profitability and strategically drive earnings growth,” said Erin Kerrigan.  “Acquisition opportunities that provide an expanding group with new strategies to grow earnings will command a premium in today’s buy/sell market.”

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

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

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

About Kerrigan Advisors

Kerrigan Advisors is the leading dealership buy/sell advisory firm focused on providing a high level of client service for dealership sellers nationwide. Led by a team of veteran advisors, Kerrigan Advisors customizes each sale process to maximize the seller’s transaction proceeds. The firm has sold 72 dealerships since 2015, including five of the Top 100 Dealership Groups in the U.S. With the most comprehensive buyer database in the industry, Kerrigan Advisors has the industry context and expertise to match every seller with the right buyer. In addition to Kerrigan Advisors’ sell-side transaction work, the firm also provides a suite of consulting services including accounting preparation for sale, litigation support, open point applications and transactional due diligence.

In addition to the monthly Kerrigan Auto Retail Index, each quarter, Kerrigan Advisors publishes The Blue Sky Report®, a Kerrigan Quarterly, which is the auto industry's most comprehensive and authoritative quarterly report and analysis of dealership buy/sell activity and franchise values.  Kerrigan Advisors’ Managing Director, Erin Kerrigan, is a recognized industry expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, AICPA, NADC, and Driving Sales’ President’s Club. She has also been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Ohio Automobile Dealer Association, and SunTrust Bank and has led webinars for NADA and Automotive News.  Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News, among other outlets.

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

Carson KIA, the Nation’s highest-volume KIA Dealership, sold to Trophy Automotive Dealer Group    

Irvine, CA, -- August 22, 2018 – Kerrigan Advisors, the leading sell-side advisory firm to auto dealers in the U.S., represented and advised Car Pros Automotive Group in their recent sale of Carson KIA, the highest volume KIA dealership in the U.S. since 2016. The buyer is the Southern California-based Trophy Automotive Dealer Group (TADG). Opened in 2017, the dealership’s new state-of-the-art facility spans 72,000 square feet, and is a flagship in KIA’s national distribution network.  This marks the 5th dealership that TADG has purchased in Southern California in recent years.

“This was a very big decision for our family.  While we have no intention of leaving the car business, we felt that selling our large KIA store in Carson made sense, both for our family and for the strategic direction of the Group,” said Matthew Phillips, CEO of Car Pros Automotive Group and son of the founder and chairman, Ken Phillips. In addition to the Carson store, Car Pros Automotive Group comprises six dealerships in Northwest Washington and Southern California. “I’d like to thank Kerrigan Advisors for smoothly guiding us through this process, with such a high level of professionalism – they truly understand everything a seller goes through and offered sensitivity, a keen understanding of the current (and future) automotive landscape and support every step of the way.”  

Kerrigan Advisors has represented on the sale of 72 dealerships since July 2015, making it the most active sell-side advisor in the auto retail industry. 

“Ken and his family are the top KIA retailers in the United States and have been a huge part of that brand’s success on the West Coast – which is also one of the most demanding and cutting-edge automotive markets in the world,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “From the start, in handling this transaction, we focused on that innovative spirit. This is a crown jewel for the KIA brand, and we were proud to be able to offer Carson KIA the representation it deserved.”

The Phillips family has retailed more than 100,000 KIAs in the U.S., more than anyone else, ever – an achievement that reflects their generational connection to the brand, and to the West Coast automotive market. “I opened my first dealership in Des Moines, Washington in 1984, based on the ideals of honesty and integrity,” said Founder Ken Phillips. “As I look back, for the past 35 years, we’ve held true to those standards in everything we’ve done. I am proud to say that our recent transaction was handled in the same fashion. Kerrigan Advisors really helped to provide the expertise we needed to transition our Group toward the next phase of Car Pros automotive retail.”

“We were honored to represent the Phillips family on this big transaction,” said Erin Kerrigan, Managing Director of Kerrigan Advisors. “This is a landmark dealership in the KIA network, and we have enjoyed working with the Phillips family to develop their game plan for the next leg of their group’s growth.  We congratulate Trophy Automotive Dealer Group on adding Carson KIA to their portfolio of Southern California dealerships.”

Gus Paras and Bert Rasmussen of Scali Rasmussen served as legal counsel to Car Pros Automotive Group.  Aaron Jacoby of Arent Fox served as legal counsel to Trophy Automotive Dealer Group.

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

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

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

About Kerrigan Advisors

Kerrigan Advisors is the leading dealership buy/sell advisory firm focused on providing a high level of client service for dealership sellers nationwide. Led by a team of veteran advisors, Kerrigan Advisors customizes each sale process to maximize the seller’s transaction proceeds. The firm has sold 72 dealerships since 2015, including five of the Top 100 Dealership Groups in the U.S. With the most comprehensive buyer database in the industry, Kerrigan Advisors has the industry context and expertise to match every seller with the right buyer. In addition to Kerrigan Advisors’ sell-side transaction work, the firm also provides a suite of consulting services including accounting preparation for sale, litigation support, open point applications and transactional due diligence.

In addition to the monthly Kerrigan Auto Retail Index, each quarter, Kerrigan Advisors publishes The Blue Sky Report®, a Kerrigan Quarterly, which is the auto industry's most comprehensive and authoritative quarterly report and analysis of dealership buy/sell activity and franchise values.  Kerrigan Advisors’ Managing Director, Erin Kerrigan, is a recognized industry expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, AICPA, NADC, and Driving Sales’ President’s Club. She has also been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Ohio Automobile Dealer Association, and SunTrust Bank and has led webinars for NADA and Automotive News.  Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News, among other outlets.

Kerrigan Advisors Media Contact:
mWEBB Communications

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