Sale of Inland Empire Toyota dealership underscores strength of the industry’s most in-demand franchise in California’s fastest growing region; transaction marks Kerrigan Advisors’ 264th dealership and 31st Toyota franchise sale

INCLINE VILLAGE, NV – May 22, 2024 – Kerrigan Advisors, the premier sell-side advisor and thought partner to auto dealers nationwide, represented California-based Gosch Auto Group in the sale of Gosch Toyota to Kevin Naderi. Gosch Toyota dealership is located in the Hemet Auto Mall, a high-volume, non-luxury car market in California’s fastest growing region, the Inland Empire. This transaction represents Kerrigan Advisors’ 264th dealership and 348th franchise sold since its founding.

“I want to congratulate the Gosch family and thank them for entrusting Kerrigan Advisors with the sale of this very high-value Toyota dealership in this fast growing market,” said Gabe Robleto, Senior Vice President, Sell-Side Advisory at Kerrigan Advisors. “It was a pleasure to support the Gosch family in this sale, which also marks our 31st Toyota franchise sold since our firm’s founding.”

Gosch Auto Group, a family-run dealership group that currently owns auto dealerships in Hemet and Temecula, was founded in 1964 by Jack Gosch following his 11 years at the Ford Motor Company. He opened Gosch Ford in downtown Hemet just three months after the Ford Mustang was introduced. Recognizing the potential of the area, Jack joined with six other dealers and the city of Hemet to develop and build the Hemet Auto Mall in the mid-80s, shortly after his sons Eric and Marc joined the family business. Over the years, their team grew to more than 620 employees; collectively they have sold over 400,000 vehicles to local customers and serviced millions of cars.

“After 60 years of doing business in this incredible community, it was important to our family to transition the dealership to the right buyer for our valuable Toyota franchise, and we thank Kerrigan Advisors for helping us to do just that,” said Marc Gosch, Co-Owner of Gosch Auto Group. “In 1972, following the success we saw with our Ford dealership, we added Gosch Toyota to our group and over the years, we’ve created a long and successful relationship with Toyota. While it is difficult to part with a dealership that has been a part of our family for decades, we are pleased to continue serving the Hemet community with our Ford, Chevrolet and Hyundai brands.” 

"Having worked very successfully with Kerrigan Advisors previously, we knew we’d get the value and results in selling this desirable franchise. And, of importance, we knew that Kerrigan Advisors had a proven track record of maximizing franchise value,” said Eric Gosch, Co-Owner of Gosch Auto Group. “Not only did they ensure a smooth transition, the Kerrigan Advisors team displayed exemplary professionalism, expertise and guidance throughout our sale process, delivering results beyond our expectations.”

Toyota dominates the Inland Empire car market, capturing 24% market share in the non-luxury segment, exceeding California and US averages by 5% and 60%, respectively. Given its superior dealer-OEM relations, #1 ranking in trust, judicious approach to electric and hybrid vehicles, and high-volume business model, Toyota remains the most in-demand franchise in the industry, as evidenced by the success of this transaction.

“Toyota is in-demand in virtually every market, especially high-volume ones like the Inland Empire. We see very high buyer demand for the Toyota franchise nationwide, given dealers’ tremendous trust in the brand and the franchise’s high levels of profitability and earnings growth, which are the best in the business,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “It was such an honor to work with the Gosch family, whom I have known for well over a decade, and to bring this transaction to a successful and beneficial outcome for all involved parties.”

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 260 dealerships representing more than $8 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

Dealership buy/sell transactions increased 6% YoY according to the Annual 2023 Blue Sky Report by Kerrigan Advisors; 680 franchises sold in 2023, an increase of 5.4% compared to 2022, defying broader corporate M&A trends

Incline Village, NV – April 9, 2024 – The auto dealership buy/sell market experienced a record year of buy/sell activity with 397 completed dealership transactions, up 6% compared to 2022, according to the just-released 2023 Blue Sky Report® by Kerrigan Advisors. This activity included the third largest transaction in auto retail history – the sale of Kerrigan Advisors’ client, Jim Koons Automotive Companies representing 20 dealerships and the addition of $3 billion of revenue to Asbury Automotive Group. Fueled by significant access to capital, auto retail defied the broader corporate mergers and acquisitions (M&A) market, which declined 30% in 2023. In 2023, 680 franchises were sold, an increase of 5.4% compared to 2022.

“Despite negative headwinds of higher interest rates and declining profit margins, dealers continued to seek acquisitions, powered by their belief that scale is not only critical to future success, but essential to sustaining their businesses in the face of an evolving industry,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “We expect the consolidation trend, ignited by the pandemic-induced surge in industry earnings, to continue in 2024 as the industry has amassed nearly a quarter of a trillion dollars of pre-tax earnings since the pandemic.”

To underscore this, Kerrigan noted that nearly half of the dealers surveyed by Kerrigan Advisors in November 2023 said they planned to acquire one or more dealerships in the next twelve months, while only 6% expected to sell dealerships in the same period. The Kerrigan Dealer Survey has the highest level of respondents of any survey in the industry at over 650.

The auto dealership buy/sell market’s outperformance relative to the broader corporate M&A market is, according to the report, a result of its distinctly private structure. The majority of dealerships are owned by private dealers, who on average own three dealerships, which minimizes the impact of the public capital markets on transaction fundamentals. “The private, fragmented composition of auto retail translates into a very insular buy/sell market, driven primarily by its own internal dynamics often unrelated to the broader public financial markets,” continued Erin Kerrigan.    

Dealership Valuations Decline Slightly, Publics’ Mark Second Highest Acquisition Spend

With an active buy/sell market driven by strong buyer demand, dealership valuations sustained historically high blue sky values in 2023, albeit lower, on average, than their peak in 2022. Kerrigan Advisors estimates that blue sky values declined on average 8% in 2023, far less than the estimated 26% reduction in industry earnings. The modest decline in blue sky is driven by buyers’ expected future earnings, not past performance.

“When earnings soared in 2021, buyers correctly projected that pandemic earnings were unsustainable and normalized earnings for valuation purposes. When earnings declined in 2023, these normalized expectations were already accounted for in most valuations and thus had less of an impact on blue sky,” said Kerrigan.   

The public dealership groups acquired 61 franchises for $2.7 billion in 2023, the second highest US acquisition spending level on record. Of note, Kerrigan Advisors was the only firm to represent sellers of dealerships acquired by the publics in 2023, selling 30 dealerships to the publics for total proceeds of $1.94 billion, representing 71% of the total public acquisition spending for the year.

The South Rises, Domestics Dominate Buy/Sell

Notably, there continues to be a clear regional bias towards business-friendly, high growth markets in the South. This region, which has led the buy/sell market for multiple years, saw its share rise to 42% in 2023, more than double that of the West and Northeast regions. Kerrigan Advisors finds buyer demand for dealerships in the Southern states to be very high, particularly those markets with the highest population growth, strong franchise laws and business-friendly climates. This trend is consistent with the record valuations Kerrigan Advisors continues to observe in many of these markets. 

Additionally, Detroit Three franchises represented the majority of the buy/sell market in 2023, taking significant share during the year. Kerrigan Advisors attributes the rise in domestics market share to an increase in the number of domestic sellers coming to market, as well as buyers’ attraction to their lower multiples. Many domestic sellers are concerned by their OEM’s electrification plans and are choosing to sell rather than manage through the EV transition.

Honda and Mazda Multiples Increased; Mazda and BMW Multiple Outlooks Upgraded to Positive

For the fourth quarter of 2023, Kerrigan Advisors increased the multiples for Honda and Mazda to reflect continued improvement in sales performance and stronger buyer demand for these franchises. Honda is regaining market share lost in 2022, resulting in its sales per franchise increasing at the fastest rate of any OEM, to second place behind Toyota.  

“Honda is the fourth most trusted brand in the industry and third most amongst non-luxury brands,” said Ryan Kerrigan, Managing Director at Kerrigan Advisors. “In our 2023 Dealer Survey, 83% of dealers expect the Honda franchise to increase in value or stay the same in 2024, above the non-luxury industry average of 78%.”

Mazda increased sales by 23% in 2023, nearly double the market rate and continues to benefit from its captive partnership with Toyota Financial Services, which was extended for another five years, resulting in an upgrade of Mazda’s blue sky multiple and outlook.

Kerrigan Advisors also upgraded BMW’s multiple outlook to positive to reflect the franchise’s outperformance in 2023, particularly with its successful EV product introductions. Kerrigan Advisors expects a future increase in the BMW blue sky multiple if buyer demand continues to rise. 

Mercedes, Nissan and Lincoln Multiples Reduced

Kerrigan Advisors reduced the multiples for Mercedes, Nissan and Lincoln. Mercedes faltered in its EV rollout, resulting in a rise in inventories and a steep reduction in gross profit margins. A softening in buyer demand for Mercedes franchises is reflected in the results of Kerrigan Advisors 2023 Annual Dealer Survey in which 14% of dealers surveyed had zero trust in the brand. Buyer demand also continues to wane for Nissan and Lincoln franchises as dealers report a lack of trust in the future of the franchise and concern about the OEM’s EV plans and ballooning inventories (140 days for Lincoln and 106 days for Nissan as of December 2023).

Kerrigan Advisors is also maintaining a negative outlook on the current blue sky multiples of Nissan, Ford, CJDR, Volvo, Lincoln and Infiniti. These franchises have the highest risk of future declines to their blue sky multiples, particularly as the auto retail market becomes more competitive and the success or failure of EV sales determines franchise profitability.  

2024 Buy/Sell Trends

In the 2023 Annual Blue Sky Report, Kerrigan Advisors identified the following three important trends that are expected to meaningfully impact the market in 2024.

·       Buyers increasingly focus on last twelve months’ financial performance to determine blue sky value

·       Top import and luxury franchises in growth markets continue to achieve record valuations

·      State electric vehicle (EV) mandates, if left unchecked, will have negative implications for blue sky values

2023 was the start of a shift in valuation methodology for blue sky as buyers are becoming increasingly focused on the last twelve months’ financial performance to determine blue sky value, according to the report.  “Going forward, active buyers are increasingly of the belief that current earnings reflect the “new normal” for our industry, so most buyers are starting to apply adjusted blue sky multiples to the most recent earnings when determining blue sky pricing, largely ignoring pandemic-period profits,” said Ryan Kerrigan. “In this regard, the second half of 2023 will serve as a significant driver of dealership valuation in 2024. The trend of emphasizing the most recent profitability will likely continue as we move through 2024.”

While valuations are trending down for most franchises, top import and luxury franchises in high growth markets continue to hit record valuations in part because many are retaining pandemic-level earnings due to growth dynamics in their markets. In addition to strong earnings performance, they have much more attractive investment characteristics. In 2023, import and luxury franchises outperformed the broader market in new vehicle sales growth, achieving 14% and 20% growth rates respectively, as compared to 11% for non-luxury and 7.6% for domestics.

Given a more challenging EV marketplace, dealers operating in CARB states will increasingly find their OEMs tested to meet the CARB EV sales thresholds required by state regulators. As currently planned, EV demand will determine total vehicle sales in CARB states starting in 2026 when 35% of vehicles sold must be electric.  “This target is aggressive given EV sales in 2023 are not near the threshold required in less than two years. A government-imposed limit on ICE sales by 2026 will impact the revenue and profits of dealerships located in CARB states, reducing a buyer’s projected earnings for those franchises,” said Ryan Kerrigan. “We believe that this decline in projected future earnings will negatively impact the blue sky values of these franchises, perhaps as early as this year.”

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

·       397 dealership transactions were completed for the full year 2023, a 3.7% increase over 2021’s prior record and a 6.1% increase over last year. The increase in buy/sell activity was primarily driven by the first half of the year, when a record 211 transactions were completed.

·       The number of franchises sold rose to 680 in 2023, the second highest level on record.

·       The number of multi-dealership transactions increased in 2023, matching 2021’s record. 32% of transactions completed during the year were multi-dealership transactions, resulting in 126 multiple dealership transactions.

·       The industry saw a significant increase in the percentage of dealers with 11 or more dealerships in 2023 and those with 5 or fewer dealerships continued to decline, reflecting an industry in the early innings of regional consolidation as a precursor to eventual national consolidation of the major metro centers.

·       The domestics represented 54% of the buy/sell market in 2023 taking 4% share from the import luxury market and 1% share from the import non-luxury market.

·      In 2023, public dealer groups acquired 61 franchises for $2.7 billion, the second highest US acquisition spending level on record (albeit 70% below 2021’s record of $9 billion). The only mega transaction completed in 2023 was the acquisition of Koons Automotive by Asbury for $1.5 billion.

·      US public dealer groups ended the year at a blue sky multiple below the 7.3x average of the top franchises, and mostly in line with the 3.75x average of domestic franchises, often leaving them priced out of the buy/sell market for top assets.

·      87% of the acquisitions made by the publics in 2023 were in the South, with just 11% in the West and 1% in the Northeast, consistent with the broader market bias towards business-friendly, higher growth markets.  

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 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 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 260 dealerships generating more than $8 billion in client proceeds, including two of the largest transactions in auto retail history – the sale of Jim Koons Automotive Companies to Asbury Automotive Group and Leith Automotive to Holman. 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 acquisition and expansion strategies, valuation assessments and benchmarking, open point proposals and real estate advisory.

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

Transaction expands Group 1’s presence in the Washington-Baltimore metropolitan region; represents Kerrigan Advisors’ 50th franchise sold in the Mid-Atlantic since 2020, making the firm the undisputed leader in dealership sell-side advisory in the region

COLLEGE PARK, MD – February 13, 2024 – Kerrigan Advisors, the premier sell-side advisor and thought partner to auto dealers nationwide, represented College Park, Maryland-based RRR Automotive Group in the sale of its five new car dealerships, including the #1 and #2 volume Honda dealerships in the state of Maryland, to Houston, Texas-based Group 1 Automotive (NYSE: GPI). This transaction underscores Kerrigan Advisors’ industry-leading track record selling the most valuable auto retailers nationwide and marks the 50th franchise sale in the region completed by the firm since 2020. With this transaction, Kerrigan Advisors has represented on the sale of over seven billion dollars on behalf of their dealership clients in just the last nine years, making the firm the leader in auto retail sell-side advisory nationwide.

RRR Automotive Group, founded by Dick Patterson and Robert Hisaoka in the 1990s, is one of the most valuable import groups in the Mid-Atlantic. The group includes Toyota of Bowie, Kia of Bowie, Honda of Owings Mills, Honda of Greenbelt, College Park Hyundai and Toyota Certified at Capital Plaza (one of the nation’s few stand-alone Toyota certified centers).  RRR Automotive Group has served its community for over 27 years through its guiding principles - Reliable, Responsible and Respectful.

“Kerrigan Advisors’ expertise selling the most valuable dealership groups and their impeccable track record of success, particularly in the Mid-Atlantic region, made them the perfect partner for this transaction. We could not have asked for a better advisor to ensure we identified the right buyer for our group and that the transaction ran smoothly from start to finish,” said Dick Patterson, CEO of RRR Automotive Group. “Gabe Robleto and the entire Kerrigan Advisors team were in lock step with us at each stage of the process, and we couldn’t have been more satisfied with the final result.”

“It was a true pleasure working with RRR Automotive Group whose premier import brands and location in one of the nation’s top economies were leading drivers of the strong buyer demand for the group,” said Gabe Robleto, senior vice president, sell-side advisory at Kerrigan Advisors. “We are proud to have shepherded this important transaction to such a successful conclusion and appreciate the trust Dick Patterson and Robert Hisaoka placed in Kerrigan Advisors. I also want to congratulate Group 1 Automotive on adding these exceptional franchises to their network.”

The transaction expands Group 1’s presence in the region and in the non-luxury import brand market. The Washington metropolitan region is an import-dominant market with market share at 72% – 24% higher than the US average, and RRR Automotive Group dominates the markets in which it operates, capturing 48% of Bowie, College Park, Greenbelt and Owings Mills’ import non-luxury sales since 2019. Additionally, the area is one of the nation’s most economically vibrant and fastest growing with a population of 10 million. The region’s GDP has grown at a 4% CAGR since 2001, far outpacing the US, and boasts high median household incomes, high educational attainment rates and superior quality of life rankings.

“This transaction highlights the continued strength of the buy/sell market for top import franchises in economically vibrant markets. Despite an elevated interest rate environment and cooling industry profits, dealerships remain one of the most lucrative retail investments in the country,” said Erin Kerrigan, founder and managing director of Kerrigan Advisors. “Leading consolidators continue to reinvest their tremendous profits into acquisitions, attracted to the high return on investment achievable with auto dealerships, particularly import franchises in growing economies like the Baltimore-Washington metro. We expect this sizable transaction is an indicator of another active buy/sell market in 2024.”

Steven H. Schram of Shapiro, Lifschitz & Schram served as legal counsel to RRR Automotive Group. Brian Nolen of Nolen, PLLC served as legal counsel to Group 1 Automotive.

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 230 dealerships generating 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 acquisition and expansion strategies, valuation assessments and benchmarking, open point proposals and real estate advisory.

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 Jim Price’s flagship Chevrolet franchise, one of the industry’s strongest domestic brands, is final and third sale for the Virginia-based auto group, all represented by Kerrigan Advisors -- and the 23rd franchise sale in Virginia for Kerrigan Advisors since 2020

Charlottesville, VA – January 9, 2024 – 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 Chevrolet to Malloy Auto Group, which has operated in the Virginia area since 1992. Kerrigan previously represented Jim Price in the sale of its Hyundai and Kia dealerships in 2023. This marks the 23rd franchise sale in Virginia completed by Kerrigan Advisors since 2020.

Jim Price opened Price Chevrolet 56 years ago in 1968 and it has operated with great success from its existing location on Seminole Trail for the past 46 years. In 2017, Price’s daughter, Sandra Price Amato, became the dealer principal for Jim Price Auto, continuing the family’s legacy as one of Charlottesville’s top dealer groups.

“This sale of our Chevrolet dealership, the final of our three auto group franchises to sell, represents the end of an era -- as well as a new beginning for the dealership and for our family. For this very significant moment in our history, we wanted an advisor with a track record of completing high value transactions across the country, and one with particular expertise in the Virginia market. Kerrigan fulfilled that, and more,” said Amato. “They were there for us every step of the way, through all three transactions; and, for the sale of this, our flagship dealership, they found in Malloy a buyer well-suited to the needs of the franchise and the community. We are grateful for the attentive, hands-on, white glove service we received from Gabe Roleto and the entire Kerrigan Advisors team.”

In addition to the dealership’s legacy, its prime market location and real estate were key components in the transaction: Price Chevrolet is located on over 10 acres in a prime retail location on Seminole Trail and Charlottesville is a growing, affluent market with an attractive cost of living, a highly educated workforce, high quality of life, high median household incomes and low cost of living. Notably, 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. 

“It was an honor to work on this transaction with Sandra Price, COO Sandy Fewell, and her entire team. This is the 3rd dealership we have had the pleasure of closing with the group in the last 6 months,” said Gabe Robleto, Senior Vice President, Sell-Side Advisory at Kerrigan Advisors. “Jim Price Auto Group’s 50 years of auto retail success, their reputation for superlative service, the power of the Chevrolet brand and the dealership’s prime real estate made it a very attractive acquisition that generated strong interest from buyers. We were pleased to have been able to help transition the dealership to an auto group with the business values, scope and reputation to continue the Jim Price Chevrolet legacy.”

Chevrolet is the fastest growing volume domestic brand in the US by new unit sales, increasing US light vehicle sales by 13.1% in 2023. In 2023, J.D. Power ranked Chevrolet #4 for vehicle quality, far ahead of its biggest competitor, Ford, and 16% stronger than the US average. 

“This transaction is another example of the appeal to buyers of high value franchises in growing, high quality-of-life and business-friendly markets. It also underscores that the buy/sell market is seeing more and more dealership groups adding scale to their regional platforms through local acquisitions,” said Erin Kerrigan, founder and managing director of Kerrigan Advisors. “We are proud to have closed what has been a record last twelve months of dealership buy/sells for both Kerrigan Advisors and the industry by helping the superlative Jim Price Auto Group sell its final dealership in a market that we know so well.”

Barrett Charapp Beaty of Mahdavi Bacon Halfhill & Young, PLLC served as legal counsel to Jim Price. Cari Lyn Pierce of Williams Mullens served as legal counsel to Malloy Auto Group.

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

Dealership buy/sells increased 11% YoY, with trailing twelve-month transactions surpassing 2021’s prior peak, according to the Third Quarter 2023 Blue Sky Report® by Kerrigan Advisors; consolidation sparked by the pandemic has yet to abate, blue sky values remain high and acquisition growth, fueled by tremendous access to capital from operations, remains impervious to interest rates

Incline Village, NV – December 18, 2023 – The auto dealership buy/sell market hit another impressive record through the third quarter of 2023 with 313 transactions completed — an 11% increase over the same period in 2022, according to the just-released Third Quarter 2023 Blue Sky Report® by Kerrigan Advisors, and is on track for another record year. For the trailing 12 months ending September 2023, the buy/sell market recorded 406 completed transactions, surpassing 2021’s prior peak.

“The buy/sell market continues to show its strength in the third quarter, impervious to the rise in borrowing costs and declines in dealership earnings which, nevertheless, remain historically high, and well above pre-pandemic averages,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors.

Through the third quarter of 2023, Kerrigan Advisors estimates auto retail generated $235 billion in pre-tax profit since 2020, much of which has yet to be reinvested in dealership acquisitions.

“The continuing uptick in buy/sell activity is attributable to more sellers coming to market, strong blue sky values and buyers’ robust pool of capital generated over the last four years from record earnings. As profits remain elevated, growing dealership groups are allocating that capital toward acquisitions,” continued Kerrigan. “Most are investing equity, rather than raising debt, and thus are less impacted by higher borrowing costs due to the rise in interest rates.”

While the number of sellers coming to market has risen, the buy/sell market remains largely a seller’s market given the substantial amount of capital still on balance sheets of dealers who are seeking to acquire dealerships, particularly high-demand franchises in growth markets. As a result, dealership valuations remain near peak levels in 2023, on average about two times pre-pandemic values, although slightly lower than 2022.

“It is important to keep in mind that dealership valuations do not rise and fall in lockstep with industry earnings. When earnings soared in 2021, buyers assumed they would come back down to earth and took that into account when buying stores,” noted Kerrigan. “As earnings start to normalize in 2023 and 2024, the impact has already been baked into valuations and thus the decline in current earnings is not having a meaningful impact on valuations, as the decline has long been assumed.”

Notably, according to the report, through the third quarter of 2023, multi-dealership transactions tracked to record levels, surging to 99, and representing nearly one third of the buy/sell market, further evidence of the industry’s focus on the importance of consolidation and scale. “The strength of this trend is reflective of the auto retail’s adaptation to the evolving marketplace where size will be an imperative to future success both on a market and group level,” said Kerrigan.

According to the 5th annual Kerrigan Dealer Survey, the percentage of dealers seeking to sell dealerships rose more than 200% in 2023 compared to 2022, while the percentage seeking to acquire declined 18%. Kerrigan Advisors believes the rise in dealerships available for sale is a byproduct of expected changes to auto retail in the coming years, which will likely require larger balance sheets and significant investments in digital retailing technology and infrastructure to support electric vehicle sales. The survey also found that 27% of dealers expect the value of their business to decline in the next 12 months. This is the highest rate since the pandemic and nearly double 2019 and 2020’s rate of 14%.

“In an evolving auto retail environment, dealers are facing a crossroads to either grow their enterprise or exit,” continued Kerrigan. “With franchise valuations still above pre-pandemic levels, and dealers concerned that blue sky could decline if profit margins normalize, more are capitalizing on today’s blue sky rather than assuming the risks associated with growth, particularly in an industry facing tremendous change due to government mandated EVs.”

US public auto retailers’ acquisition spending on US dealerships through the third quarter of 2023 declined 26% to $1.1 billion, from the same period in 2022, but their spending on international and other business acquisitions increased 165%, resulting in an overall rise in capital allocated to investments for the year. This is the first time since Kerrigan Advisors started tracking these companies that their collective capital allocation to US dealership acquisitions was in line with both their allocation to capital expenditures and international & other investments.

“This is a clear sign that the publics are assessing their growth strategy, not only through US dealership acquisitions but also in relation to the evolving global auto retail marketplace,” said Kerrigan. “Their allocation to alternative investments, such as foreign dealership groups, financial services companies and technology solutions is a reminder of the multiple options available to the largest groups in the industry. The publics can, and will, invest in the most economically attractive opportunities for their shareholders and are making these investments with the changing auto retail marketplace in mind.”

Third Quarter 2023 Buy/Sell Trends

Kerrigan Advisors has identified the following three important trends that we believe will meaningfully impact the buy/sell market over the next 12 months:

• 2019 financial performance increasingly irrelevant to valuation
• Leasing dealership real estate (versus buying) becomes more economic
• OEMs’ EV strategies impact future franchise profitability and blue sky value

“Pre-pandemic performance is increasingly irrelevant when assessing franchise value - 2019’s dealership financial performance is not only almost four years old, but also a reflection of a very different retailing environment,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “Buyers who seek to superimpose 2019 earnings as a replacement for projecting normalized earnings are overlooking the substantial and evolving differences between the pre- and post-pandemic auto retail business model.” 

The pandemic motivated dealers to heavily scrutinize operating expenses, particularly employee productivity, which ultimately resulted in significant improvements in operational efficiencies.  

In addition to fewer employees producing more revenue, the industry continues to evolve significantly as auto retail has become increasingly reliant on big data and technology to optimize sales. Perhaps the best most recent example of this changing dynamic is Hyundai’s November announcement of its Amazon partnership for the sale of new vehicles. With the AI revolution, auto retailing will undoubtedly continue to change, making 2019, and the historical way of retailing, a vestige of the past.

EVs continue to impact the buy/sell market as dealership buyers are increasingly limiting the number of Evs they are willing to purchase, concerned about exposure to low-demand devaluing inventory. Today, many dealerships are sitting on over 100 EV days’ supply as consumers are unattracted to the high price tags and logistical challenges associated with EV ownership, driving a low demand environment for EVs, with a resulting increase in EV discounting at the dealer level, led by Tesla, which has reduced prices 22% year-over-year per KBB.

“In the next two years, Kerrigan Advisors sees the auto retail industry approaching a challenging tipping point in EV sales,” continued Ryan Kerrigan. “The government mandated transition to EVs will likely have major implications for franchise values, depending not only on the success of an OEM’s sales strategy, but also on location. With CARB states currently mandating that 35% of OEM sales be zero emissions by 2026, OEMs will have a financial incentive to send the majority of their EV vehicles to those states (currently 15 states), resulting in greater disparities in EV and ICE availability from state to state. This disparity could lead to monumental differences in dealership profitability based on location and, ultimately, greater gaps in franchise value, adding a new variable to blue sky valuation.”

Toyota, Honda, Subaru, Porsche and Lexus Multiples Increased; Ford Sees Reduced Multiple; Ford, Nissan, CDJR and Lincoln Multiple Outlooks Downgraded

For the third quarter of 2023, Kerrigan Advisors increased the multiple outlooks for five franchises namely Toyota, Honda, Subaru, Porsche, and Lexus. These franchises join Kia as those most likely to see improvements in valuation in the coming year. Toyota continues to outperform on every level.

“Toyota is the most trusted franchise by dealers, with an incredible 72% of dealers surveyed having a high level of trust in the franchise,” said Erin Kerrigan. “This monumental lead in the trust equation has resulted in the franchise having the highest expected increase in profits as a result of the OEM's retailing changes and the highest buyer demand in Kerrigan Advisors’ buyer database.”

Ford’s multiple was reduced by 0.25 on the high-end, resulting in a revised blue sky multiple range of 3.25 to 4.0, in line with CJDR. Ford remains the franchise most expected to see a decline in value because of the OEM’s changes to its retail model. Consistent with this negative sentiment, Ford is the non-luxury franchise least expected to see a rise in valuation in the next 12 months. These results reflect dealers’ lack of trust in the OEM with Ford ranking as the least trusted franchise. With this lack of trust, Kerrigan Advisors has seen a notable rise in Ford dealers seeking a sale.

Kerrigan Advisors also downgraded the outlook for four franchises, including Ford, Nissan, CDJR and Lincoln. The negative outlook for these franchises is driven by their poor results in the 2023 Kerrigan Dealer Survey, particularly on the question of trust. Most notably in the survey, CDJR saw a significant increase in dealers expecting the franchise to decline in value, from 24% in 2022 to 53% in 2023 – a 29-percentage point increase. Kerrigan Advisors expects this negative dealer sentiment reflects CDJR’s rising inventory levels and lack of incentive spending. Also, 39% of dealers have no trust in CDJR, placing the OEM as the 4th least trusted franchise.

Highlights from the Q3 2023 Blue Sky Report® by Kerrigan Advisors include:

·       313 dealership buy/sell transactions were completed through the third quarter of 2023, an 11% increase, resulting in 406 transactions for the 12 months ending September 2023.

·       99 multi-dealership transactions were completed through the third quarter, representing nearly one third of the buy/sell market.

·       Among the franchises being acquired, domestic franchises increased their buy/sell market share five percentage points to 54%, taking share from import non-luxury franchises.

·       Domestics retained their majority share of the buy/sell market in 2023; however, more than 30 Kia and Hyundai franchises sold in third quarter alone resulting in those franchises leading import buy/sell market share and overtaking Toyota and Honda for the first time this year.

·       94% of the franchises sold through the third quarter 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 74%. The US public dealer groups acquired 6% of franchises sold through the third quarter of 2023.

·       US public auto retailers’ acquisition spending on US dealerships through the third quarter of 2023 was $1.1 billion, a decline of 26% from the same period in 2022. On a trailing twelve-month basis, the publics spent $2.7 billion on investments, the second highest level since 2021, with nearly half of their investments going to non-US dealerships.

·       During the quarter, Asbury announced the $1.2 billion acquisition of Jim Koons Automotive Companies, a Kerrigan Advisors’ client, which closed on December 11, 2023. The Koons acquisition is the third largest in auto retail history in terms of purchase price and the highest price ever paid for a regional dealership group. AutoNation, Lithia and Penske also completed US acquisitions during the third quarter.

·       Through the third quarter of 2023, the US public dealer groups’ new vehicle gross profit margins were 145% higher than pre-pandemic averages.

·       Kerrigan Advisors’ 2023 Dealer Survey found that 27% of dealers expect the value of their business to decline in the next 12 months, the highest rate since the pandemic and more than double 2019 and 2020’s rate of 14%.

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. 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 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

Transaction highlights desirability of single point luxury, import franchises in middle market locations such as Fresno; Transaction marks Kerrigan Advisors’ 52nd top luxury franchise sold

INCLINE VILLAGE, NV – November 13, 2023 – Kerrigan Advisors, the premier sell-side advisor and thought partner to auto dealers nationwide, represented Fresno, California-based Haron Motor Sales in the sale of Haron Jaguar, Land Rover and Volvo to Temecula, California-based Unstoppable Auto Group, owned by Garth Blumenthal. Unstoppable is now comprised of nine new car dealerships across California. Since the firm’s founding, Kerrigan Advisors has sold over 225 dealerships and 52 top luxury franchises. In 2023 alone, the firm is on track to sell more than 70 franchises representing $2.6 billion in client proceeds, making Kerrigan Advisors the leading sell-side advisor in auto retail.

“It was our pleasure to assist the Haron family in this historic transition of the family business to new ownership. The Harons have been pillars of the downtown Fresno business community for generations,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “With the sale to Unstoppable Auto Group, the dealership remains in the hands of private owners who are deeply invested in the Fresno market.”

Since 1945, three generations of the family have owned and operated the Haron dealership downtown. Founded by Charles Haron, Charles’ nickname of “Haron the Baron, the Sports Car King of the Valley,” quickly became famous in Fresno — as did his affinity for British performance cars. What started as Triumphs and MGs eventually turned into Jaguars in 1981, then evolved to Land Rover and Volvo. A fixture of the Fresno community for 78 years, Haron Motor Sales is known for its excellence in sales and service and boasts high customer service and employee relations.

“The dealership is family. Working at the dealerships is something that we all grew up doing, and how we built our lives,” said Jim Haron, Co-Owner of Haron Motor Sales. “The decision to sell was a difficult one for us. So, when we decided to sell, we wanted to be really careful and very strategic, which is why we selected Kerrigan Advisors who delivered a highly customized sale process to achieve our personal and strategic goals in the transaction.” 

The Haron family’s community reputation was built on their strong advocacy of Fresno, in particular Downtown Fresno. As the former Chairwoman of the Board of Directors for The Downtown Fresno Partnership, Co-Owner Hilary Haron directed the organization that revitalized downtown Fresno.

“After so many decades, and so many generations, we knew we were offering a highly valued dealership with a long legacy,” said Hilary Haron. “We wanted to find a buyer who would do well by our community and the legacy of our dealership. Kerrigan Advisors knew exactly how to identify that buyer, one that was right not only for us, but also for our customers, our employees and for Fresno.”

Hilary Haron was recently honored as an Automotive News 40 Under 40 Honoree, a member of the California New Car Dealers Association’s board of directors (CNCDA) since January 2019, and a Director At-Large West on the National Automobile Dealers Association (NADA) Board.

Said Randy Haron, Co-Owner of Haron Motor Sales: “Our highest priority in this transition was to ensure that the dealership continued to provide the stellar customer service that our name has always stood for. With Unstoppable Auto Group, we found a new owner with a track record of service excellence, and we thank Kerrigan Advisors for helping us achieve this key goal. They were instrumental to the sale process, from preparation, identification of strong buyers, marketing, negotiation, manufacturer approval and ultimately, closing. We could not have done this without them.”

Jaguar, Land Rover and Volvo are favorably positioned in the current market, especially given their attractive SUV lineups: Land Rover as an exclusive SUV/truck brand and Volvo with a growing share of SUV sales. In addition, Fresno has become a strong luxury new car market, with a market share of 25%, significantly higher than California and US. In addition, since 2000, Fresno’s population has grown an impressive 26% and the area now ranks the 7th largest in the state. By 2060, the area’s population is expected to surpass 1.27 million.

“This transaction reflects the high demand for luxury brands in the dealership buy/sell market, especially when represented by a single point in a sizeable, growing market such as Fresno,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “We are proud to have helped the Haron family achieve their goals for this transaction and are happy to have found a buyer who will continue the Haron family’s legacy of excellence in the Fresno community.”

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 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

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 underscores buyer demand for high growth markets; represents 207th dealership sold by Kerrigan Advisors, the leading buy/sell advisor in Phoenix 

PHOENIX, AZ – October 31, 2023 – Kerrigan Advisors, the premier sell-side advisor and thought partner to auto dealers nationwide, represented Mesa, Arizona-based East Valley Nissan, owned and operated by Greg Burk, in its sale to Phoenix, Arizona-based Courtesy Automotive Group. This marks the 207th dealership sale led by Kerrigan Advisors since 2015. It is the sixth Phoenix dealership Kerrigan Advisors has advised on, making the firm the leading sell-side advisor in the market having represented 2/3 of all buy/sell transactions in Phoenix since Q4 2020.

“We were proud to work with Greg Burk on the sale of this high-performing dealership in such an important auto retail market,” said Gabe Robleto, Vice President of Sell-Side Advisory. “We applied our extensive experience in Arizona to finding a buyer who not only understood the value of this retail market, but who also could continue East Valley Nissan’s success in sales and customer service and its position as a valued part of the Mesa community. We were pleased to identify the perfect match in Scott Gruwell and his aptly named Courtesy Automotive Group.”  

East Valley Nissan is located in the Superstition Auto Mall in Mesa, one of Phoenix’s fastest growing cities and home to several universities and significant real estate developments. Phoenix is one of the top Nissan markets in the country by volume, market share, profitability and fixed operations as well as being the 3rd fastest growing metro in the US: in 2022, Phoenix’s population growth outperformed the US by 381%, and the metro is expected to reach more than 7.6 million residents by 2055.

“I am grateful to Kerrigan Advisors for their tremendous work on this transaction; they exceeded my expectations in every regard,” said Greg Burk, owner of East Valley Nissan. “Selling an import franchise in a high-demand market is a complex undertaking. Bringing on Kerrigan Advisors to help complete the sale was a stellar value-add, and it is why I am confident that the East Valley Nissan team and its current, and future, customers are in excellent hands.”

In addition to being a top Nissan market, Arizona is a top auto retail market and its dealerships are some of the most profitable in the US, with one of the highest revenue-per-dealership in the country. Nissan, which is in the midst of tremendous sales growth fueled by production improvements and a refreshed product pipeline, boasts cost-friendly vehicles, including the #1, #8 and #10 most affordable vehicles in the US, an ideal lineup for Mesa’s young and rapidly growing residential population.  

“Arizona truly represents the sweet spot when it comes to buy/sell demand and dealership valuations – a top auto retail market fueled by population growth and a business-friendly environment. This, coupled with Nissan being a high-performing franchise in Phoenix, typifies where the buy/sell market is today with buyers exhibiting a deep focus on the top franchises and the top markets” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “We were honored to be back in a market we know well to help Greg navigate this transaction and bring it to a successful conclusion that benefitted seller, buyer, franchise and community. Kerrigan Advisors is honored to be the leading sell-side advisor in the Phoenix market and expects to see continued buyer demand for franchises in the area.”

Kerrigan Advisors is the most active sell-side advisor on larger transactions in the auto retail industry. In 2023, the firm is on track to sell 52 dealerships representing over $2.6 billion in client proceeds, more than any buy/sell advisor in the industry. 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 acquisition valuation analysis, creating value for their clients at every stage of the auto retail lifecycle.

John Norling of Gallagher & Kennedy served as legal counsel to the seller. Christine Smith of Crowe LLP was the seller’s accountant. Michael Smalley of Bergin, Frakes, Smalley & Oberholtzer served as legal counsel to the buyer.

About Kerrigan Advisors

Kerrigan Advisors is the leading sell-side advisor and thought partner to auto dealers nationwide. 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 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

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