Sale of Gosch Ford Escondido to Aaron Automotive Group represents the 203rd dealership sold by Kerrigan Advisors since 2015; The sale confirms the strong interest of buyers in high volume markets with leading brands

INCLINE VILLAGE, NV – September 21, 2023 – Kerrigan Advisors, the premier sell-side advisor and thought partner to auto dealers nationwide, represented Hemet-based Gosch Auto Group in the sale of Gosch Ford Escondido to Aaron Automotive Group, led by Vikas Mehandroo. The transaction marks the 203rd dealership sold by Kerrigan Advisors since 2015 and the 32nd franchise sale in 2023, making the firm the most active in the industry.

“Kerrigan Advisors was honored to represent the Gosch family in this strategic divestiture of Ford Escondido,” said Gabe Robleto, Vice President, Sell-Side Advisory of Kerrigan Advisors. “It’s a complex business decision to sell a high performing dealership in a growth market. We’re pleased to have been able to identify a buyer who understood the value proposition of Ford Escondido and the attractive growth dynamics of Escondido and the San Diego market.”

The Gosch family opened their first Ford dealership in Southern California almost 60 years ago, when family patriarch Jack Gosch opened Jack Gosch Ford in downtown Hemet. His timing was impeccable, as it was just three months after the Ford Mustang was introduced. The Gosch family currently owns auto dealerships in Hemet, Temecula and Escondido. Over the years, the larger team grew to over 620 employees; collectively they have sold over 400,000 vehicles to local customers — and have serviced millions of cars.

“We’ve been successful in Escondido and in all of our locations because we know the communities we serve and our employees care about our customers, which is critical to a thriving dealership business,” said Marc Gosch, Co-Owner of Gosch Auto Group. “Kerrigan Advisors’ team offered that same level of commitment to us as their customer. The firm’s professionalism, deep industry knowledge and their team’s dedication to client service showed throughout this transaction. They understood our needs and expertly guided us through the sales process.” Eric Gosch, Co-Owner of Gosch Auto Group continued, “The Kerrigan Advisors’ team knew how to find the right buyer and meet the strategic transaction goals of our group. We were in excellent hands with Erin Kerrigan and Gabe Robleto leading the way. That’s why we chose them — we knew they would deliver the results we expected.”

Located in San Diego, one of the highest volume auto retail markets in California and ranked as the 12th best place to live in the US, Gosch Ford Escondido is a thriving image-compliant dealership representing the top domestic brand in California, Ford, which has one of the most popular lineups of trucks and SUVs. In 2022, the Ford Bronco ranked one of the top large SUVs sold in California and was named North American Car, Truck and Utility Vehicle of the Year. Escondido is a growing San Diego suburb, home to 153,000 residents, with a high-volume auto market and a population increase of 15% since 2000. The dealership has an expansive real estate footprint of over 9 acres in a high-traffic location, making it an optimal dealership to buyers.

“Buyers are attracted to high-volume markets that sell top brands like Ford, which is one of the leading non-luxury franchises in California,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors.  “This sale demonstrates the value proposition of Kerrigan Advisors’ professional sale process in identifying the best buyer at the highest blue sky value on behalf of our clients. We are thrilled for the Gosch family and grateful for the opportunity to represent them on this valuable transaction.”

Kerrigan Advisors is the most active sell-side advisor on larger transactions in the auto retail 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.

About Kerrigan Advisors

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

Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, which includes Kerrigan Advisors’ signature blue sky charts, multiples, and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases monthly The Kerrigan Index™ composed of the seven publicly traded auto retail companies with operations focused on the US market. The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here. To read the 2022 Kerrigan Dealer Survey, click here. To read the 2023 Kerrigan OEM Survey, click here. Kerrigan Advisors also is the co-author of NADA’s Guide to Buying and Selling a Dealership.

Kerrigan Advisors Media Contact:

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

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

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

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

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

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

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

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

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

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

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

2023 Buy/Sell Trends

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

·       Higher interest rates have minimal impact on blue sky values

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Blue Sky Report®, published by Kerrigan Advisors, is the auto retail industry's most comprehensive and authoritative quarterly report on dealership M&A activity, as well as franchise values. The quarterly report, received by over 11,000 industry recipients in 35 countries, includes analysis of all dealership transaction activity for the year, and lays out the high, average and low blue sky multiples for each franchise in the luxury and non-luxury segments. For more details and to preview the report, click here. To sign up to receive the quarterly report, click here.

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

About Kerrigan Advisors 

Kerrigan Advisors is the premier sell-side advisor and thought partner to auto dealers in the US. The firm advises auto dealers nationwide, enhancing value through the lifecycle of growing, operating, and monetizing their businesses. Since the firm’s founding, Kerrigan Advisors has had the honor of representing the industry’s largest transactions, including more Top 150 Dealership Groups than any other firm in the industry. Led by a team of veteran industry experts, the firm does not take listings, rather Kerrigan Advisors develops a customized approach for each client to achieve their personal and financial goals. In addition to Kerrigan Advisors’ sell-side advisory and capital raising services, the firm also provides a suite of consulting services including growth strategy, market valuation assessments, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate due diligence.

Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report of dealership buy/sell activity and franchise values, received by over 11,000 industry participants in 35 countries. To register to receive The Blue Sky Report®, click here. Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly report tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here.

Kerrigan Advisors Media Contact:

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

Sale of Nick Alexander BMW to Car Pros Automotive Group includes MINI and Collision Center, and represents the 201st & 202nd dealership, 50th top luxury franchise sale led by Kerrigan Advisors since 2015

Los Angeles – August 28, 2023 – Kerrigan Advisors, the premier sell-side advisor and thought partner to auto dealers nationwide, represented Los Angeles-based Nick Alexander Imports in the sale of Nick Alexander BMW and Nick Alexander MINI to Renton, Washington-based Car Pros Automotive Group, the US’ 45th largest dealership group and owner of 10 dealerships, including four in Southern California. The transaction marks the 201st and 202nd dealership and 50th top luxury franchise sale since 2015. 

“It's been a great pleasure to work with the Alexanders, whom we've known for years and who will be missed in the automotive retail industry,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “We were aware that the decision to sell was understandably an emotional one for the Alexander family. With that in mind, our team worked hard to achieve a great financial outcome through a transaction that allowed the Alexanders to feel positive about the future of their business and their people. With the sale to Car Pros, the family was able to achieve that goal.”

The Alexander family has served the downtown Los Angeles market since 1978. Nick Alexander BMW is a multiple winner of BMW's "Center of Excellence" and "President's Cup” awards. Nick Alexander MINI ranks 3rd highest volume in the US by 2022 new MINI sales.

“We have owned this BMW franchise for 44 years, so the decision to sell was not an easy one. You only sell once, and we needed the best representation in the business to ensure a smooth transaction and to find a buyer who could represent the best interests of the franchise, employees and community” said Nick Alexander, Co-owner and Operator of Nick Alexander Imports. “We’ve known Ryan and Erin Kerrigan and Kerrigan Advisors for years, and we knew that when the decision to sell came, they were the only choice to represent our family. Their proven track record of successful sales continued with this transaction.”

Nick Alexander BMW, MINI and its collision center are housed in renovated, state-of-the-art facilities serving the rapidly growing downtown Los Angeles (LA) market, which is thriving under massive real estate development. Downtown LA has become a highly desirable place to live and is home to some of the US’ largest corporations. Los Angeles is the nation’s largest car market and its economy ranks as the 2nd and 18th largest economy in the US and world, respectively.

“We have benefited from Kerrigan Advisors’ guidance throughout the sale process, from start to finish. Our transaction was a unique one in multiple ways, including our location, large parcels of highly valuable real estate, and BMW operations intertwined with MINI to name a few,” said Elizabeth Alexander, Co-owner of Nick Alexander Imports. “The Kerrigan team was able to work through those complexities and ultimately identify a buyer who understood our operations, and valued our unique business and the opportunities it presented.” 

Los Angeles is the top luxury car market in the US and BMW is an industry leader among volume luxury brands: it has the second highest sales per franchise of all luxury brands and is one of the top luxury brands in Southern California. According to Kerrigan Advisors Q1 2023 Blue Sky Report®, the luxury import segment outperformed the domestic and non-luxury import segments by 85% and 202%, respectively, based on first quarter 2023 US light vehicle sales and appears to be somewhat insulated from rising interest rates, strengthening the segment’s valuations.

“We were honored to work with Nick, Elizabeth and their team in the sale of one of the automotive industry’s premier luxury brands in a top luxury market,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “The success of this transaction is more evidence that, with strong constantly high profitability and unit sales growth, luxury franchises continue to command elevated valuations, giving further ballast to the robust 2023 auto dealership buy/sell market.”

Kerrigan Advisors is the most active sell-side advisor on larger transactions in the auto retail 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.

David Meyer, Hen Amir and Gus Paras of ArentFox Schiff served as legal counsel to the seller. Halbert Rasmussen and One Choi served as legal counsel to the buyer.

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. 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 seven dealerships underscores strong buyer demand for growth markets like South Carolina, one of the top 10 markets requested in Kerrigan Advisors’ proprietary Buyer Database

Greeneville, SC – August 23, 2023 – Kerrigan Advisors, the premier sell-side advisor and thought partner to auto dealers nationwide, represented Greenville, South Carolina-based MCE Automotive Group, owned and operated by the Escude family, in the sale of their seven dealerships to North Carolina-based Anderson Automotive Group, ranked 71st largest US dealership group in the US by 2022 new unit sales. The transaction includes Toyota of Greer, Kia of Greenville, Kia of Greer, Hyundai of Greer, Genesis of Greer, Nissan of Greer and Mike Hovart Chevrolet and represents nearly $500 million in revenue. This marks the 200th dealership sale led by Kerrigan Advisors since 2015 and the 22nd Toyota dealership sold, making Kerrigan Advisors the most active sell-side advisor to Toyota dealers in the US.  With the sale of MCE Automotive Group, Kerrigan Advisors has completed transactions representing over $4 billion in client proceeds since 2020.

“It was a true honor to represent the Escude family in the sale of their highly valuable, premier dealerships in the thriving Greenville, South Carolina market. The MCE transaction is indicative of the tremendous demand for dealerships located in South Carolina, one of the top 10 markets requested by buyers,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “The Escude family’s dealerships, anchored by the best import franchises - Toyota, Kia, and Hyundai - represent some of the highest volume franchises in the Greenville market and are housed in state-of-the-art facilities. We are so pleased to see these sought-after dealerships transfer to another multi-generation Carolina family, ensuring the Escude’s legacy of top customer service and community engagement lives on in Greenville.”

Greenville serves as the economic anchor of Upstate South Carolina, with over 60% of the Upstate population residing in an area that touts a low cost of living and a high quality of life (#2 Best Place to Live in the state and #15 Lowest Cost Place to Live in the US). It is one of the three largest metro areas in South Carolina and has the fastest growing population (67% rise in population since 2000). MCE Automotive Group captures 14% market share of Greenville’s new units sold, with a 45% share in Greer, a thriving Greenville suburb. The sale includes seven recently built or renovated dealerships, and over 39 acres of property. The dealerships operate in three Greenville markets: Greer (Toyota, Hyundai, Kia, Nissan, and Genesis), Greenville (Kia), and Easley (Chevrolet). MCE Automotive is also the exclusive Kia dealer for the Greenville MSA.

“Toyota, Kia and Hyundai are some of the industry’s strongest import brands, with the highest valuation growth expectations according to our recent Dealer Survey,” continued Erin Kerrigan. “Not surprisingly, there was tremendous buyer demand for the MCE Automotive Group, given the group’s tremendous financial performance and the fact that MCE is anchored by top import franchises.” Kerrigan noted that since 2019, the valuation expectations for Kia and Hyundai have shifted upward over 26 percentage points, while Toyota, the most valuable non-luxury import franchise, continues to outperform most franchises in valuation growth expectations.

“As a family, we’re forever grateful to our employees and the community of Greenville for choosing our dealerships. For us it’s always been about taking care of our customers and employees, as well as being good stewards of our resources on behalf of the community,” said Mark Escude, Sr., President of MCE Automotive Group. “Whether through our lasting commitment to the March of Dimes, or our investment in local charities, we care about the people of Greenville. This is why our choice of Kerrigan Advisors to manage our sale process and achieve our goals in a transaction was so important to me and my family. Only Kerrigan has the deep knowledge and expertise to identify the right buyers for the largest groups in the industry along with the proven track record to ensure the sale goes smoothly and is run professionally.”

“In choosing Kerrigan Advisors, we knew we were in good hands,” continued Escude. “The Kerrigan team, particularly Mercedes Hendricks and Marie Brashears, went above and beyond when managing the sale process, from accurately reflecting our historical earnings to overseeing the buyer’s due diligence process and the closing. Erin Kerrigan’s personal relationships with top OEM executives also ensured our sale process ran on schedule, even with seven required OEM approvals. We are very grateful for the thoughtful advice and hard work of the entire Kerrigan team to ensure our sale was a tremendous success.”

“We were proud to advise the Escude family with this complex transaction,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “Greenville, South Carolina is a dynamic market with an increasing population, driven by a high quality of life and low cost of living, making MCE highly desirable. Our data, and the trends we are seeing, demonstrate the Carolinas are one of the top areas for growing dealership groups, resulting in price premiums. This transaction proved out that trend.”  

Kerrigan Advisors has facilitated 28 multi-dealership transactions since 2020, making the firm the most active sell-side advisor on larger, more complex transactions in the auto retail industry. The firm attributes its success to the team’s laser focus on fulfilling each client’s personal and professional goals, as well as their commitment to managing every step of the transaction through closing. 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 clients at every stage of the auto retail lifecycle.

For MCE Automotive Group, Sai Ireland and Barry Cannada of Butler Snow LLP served as legal counsel and John Bishop Jr. of Bishop and Draper, CPAs was MCE’s accountant. For the buyer, Jeff Roberts of Underwood & Roberts, PLLC served as legal counsel and Travis Horton of Henderson Hutcherson & McCullough, PLLC was Anderson’s accountant.

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 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

Majority of Automakers Expect New Vehicle Gross Margins to Remain Above Pre-Covid Levels, Though Dealership Profits Are Projected to Decline

New survey from Kerrigan Advisors reveals that OEMs are looking at a new normal when it comes to dealership profitability, lower inventory levels and more OEM involvement in pricing; 68% expect some form of non-negotiable pricing to be part of future EV retail model

Incline Village, NV – August 7, 2023 – Dealership new vehicle gross margins to remain above pre-Covid levels say 90% of automotive OEMS, according to the just-released annual Kerrigan OEM Survey, but the majority believe dealership earnings will still decline over the next 12 months. The survey, gathered from Kerrigan Advisors’ annual survey of automotive OEM executives in conjunction with the issuance of The Blue Sky Report®, indicates that automakers are looking at a ‘new normal’ when it comes to dealership profitability, inventory levels and customer data sharing. The survey also offers a window into how OEMs view the future of electric vehicle pricing, with 68% expecting some change to pricing methodology.

“This survey was designed to gauge OEM executives’ perspectives on the franchise system, dealer profitability and expected changes to the retail model with the rollout of new drivetrains. It offers an important window into the perspectives of OEM executives whose views are not often shared publicly in the industry,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “The results also demonstrate the value OEM executives place in their dealer networks, even as the auto retail model evolves.”

Profits and Days Supply

While only seven percent of OEMs surveyed expect dealership profits to increase in the next 12 months, three-out-of-four expect new car margins to land somewhere between current and pre-Covid levels. This view is supported by the fact that respondents expect inventory levels to remain low, with 59% expecting days’ supply of 30 days over the next 12 months, and 82% expecting the ‘new normal’ for days’ supply will remain lower than pre-pandemic averages.

EV Pricing Model

A key OEM/dealership relationship issue addressed by the survey is the future pricing model for electric vehicles, which revealed that nearly one-half (48%) believe some form of non-negotiable pricing will be a part of the retail model of the future, with 20% expecting non-negotiable pricing to be the exclusive means for selling electric vehicles. Only 32% of respondents believe the traditional MSRP pricing model will continue for electric vehicles.

“The data on EV pricing was enlightening, as was data that showed few see the much-discussed EV agency model coming to the US, with just 22% projecting that change, likely due to the strength of state franchise laws in the US,” continued Erin Kerrigan. “The OEM/dealer relationship will continue to evolve as electric vehicles gain market share and alternative retailing models, such as the agency model, are tested. While there will be inevitable conflict, Kerrigan Advisors believes the relationship between the OEMs and their dealers is largely on solid ground and well positioned to manage the evolution of US auto retail.”

Customer Data and Real Estate

Another key topic related to the evolving retail model investigated by the survey is customer data and relationship retention, with the majority of OEMs (66%) expecting both the dealer and OEMs to share the customer data over the next five years, a change from the past when dealers almost exclusively owned the customer data and relationship.  

With regard to dealership real estate, the survey reveals that the majority of OEM executive respondents predict facility requirements will either stay the same (52%) or increase (32%), which is surprising given their expectation for reduced inventory and likely fewer employees with a more streamlined, non-negotiable sales process.

“The results of the 2023 Kerrigan OEM Survey are indicative of a business model that is in transition, with OEM views that are not always internally consistent with their proposed retailing changes which are clearly evolving as more data becomes available,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “While OEMs and dealers will definitely have differing views on the path forward for electric vehicles, customer data and facility requirements, for the most part, OEMs expect the dealer to remain a key and profitable piece of the auto retail puzzle.”

Key Survey Data

·       69% expect dealership profitability to decline in the next 12 months, while 31% project profits will stay the same or increase. 

·       10% believe new car margins will return to pre-Covid levels, while 74% expect them to settle between pre-Covid and current levels in the next 12 months. 16% of respondents project high margins will continue through 2023.  

·       59% project days’ supply to be 30 days in the next 12 months; just 3% project a rate of 90 days or more.

·       60% expect the ‘new normal’ for new vehicle days’ supply to settle in at 30 to 60 days, below the pre-Covid average of 60 to 90 days.

·       68% believe some form of non-negotiable pricing will be a part of the retail model of the future with 20% expecting it to be the exclusive means for selling electric vehicles. Only 32% believe the traditional MSRP pricing model will continue for electric vehicles.

·       35% do not believe an agency model will materialize in the US auto retail marketplace, while 43% remain unsure and 22% think it will be introduced to the US in the next five years.

·       66% believe the customer relationship/data will be owned both by the OEM and dealer in five years. 16% expect the OEMs to have exclusive ownership, while 17% believe the dealer will.

·       52% believe facility requirements will largely remain the same over the next 5 years. 32% believe facility requirements will increase and 16% anticipate a decrease. 

To download the full 2023 Kerrigan OEM Survey results, click here.

Methodology

The data for The Kerrigan OEM Survey was gathered from Kerrigan Advisors’ annual survey of automotive OEM executives in conjunction with the issuance of The Blue Sky Report®. The Kerrigan OEM Survey is based on over 115 responses from OEM executives in Kerrigan Advisors’ proprietary database. Responses were collected from December 2022 to May 2023.

About Kerrigan Advisors

Kerrigan Advisors is the premier sell-side advisor and thought partner to auto dealers nationwide. The firm advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses. Kerrigan Advisors has represented on some of auto retail’s largest transactions and advised on the sale of more top 150 Dealership Groups, 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 publishes The Blue Sky Report®, which is the auto industry’s most comprehensive and authoritative quarterly report of dealership buy/sell activity and franchise values, received by over 11,000 industry participants in 35 countries. To register to receive The Blue Sky Report®, click here. Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly report tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here.

Kerrigan Advisors Media Contact:

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

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

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

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

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

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

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

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

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

2023 Buy/Sell Trends

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

·       Highest volume franchises continue to command price premiums

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Blue Sky Report®, published by Kerrigan Advisors, is the auto retail industry's most comprehensive and authoritative quarterly report on dealership M&A activity, as well as franchise values. The quarterly report, received by over 11,000 industry recipients in 35 countries, includes analysis of all dealership transaction activity for the year, and lays out the high, average and low blue sky multiples for each franchise in the luxury and non-luxury segments. For more details and to preview the report, click here. To sign up to receive the quarterly report, click here.

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

About Kerrigan Advisors 

Kerrigan Advisors is the premier sell-side advisor and thought partner to auto dealers in the US. The firm advises auto dealers nationwide, enhancing value through the lifecycle of growing, operating, and monetizing their businesses. Since the firm’s founding, Kerrigan Advisors has had the honor of representing the industry’s largest transactions, including more Top 150 Dealership Groups than any other firm in the industry. Led by a team of veteran industry experts, the firm does not take listings, rather Kerrigan Advisors develops a customized approach for each client to achieve their personal and financial goals. In addition to Kerrigan Advisors’ sell-side advisory and capital raising services, the firm also provides a suite of consulting services including growth strategy, market valuation assessments, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate due diligence.

Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report of dealership buy/sell activity and franchise values, received by over 11,000 industry participants in 35 countries. To register to receive The Blue Sky Report®, click here. Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly report tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here.

Kerrigan Advisors Media Contact:

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

Sale of Houston area Kia dealership highlights the strength of the Kia brand in a large and high-growth metro area; the transaction marks Kerrigan Advisors’ 7th dealership sale in Texas in 2023

Houston, TX – June 7, 2023 – Kerrigan Advisors, the premier sell-side advisor and thought partner to auto dealers nationwide, represented Houston, Texas-based Beck & Masten Auto Group in the sale of Beck & Masten Kia to Houston, Texas-based Group 1 Automotive (NYSE: GPI). This marks the 187th dealership sale transaction led by Kerrigan Advisors since 2015, and 11th Kia dealership sold.

The sale underscores the emerging power of the Kia brand in fast-growing, business-friendly markets like Texas. Beck & Masten Kia is ideally located in Tomball, a northwest Houston suburb adjacent to the fast-growing and affluent Woodlands area.

“Beck & Masten Kia’s success represents a compelling example of Kia’s tremendous accomplishments in recent years and the rising value of the franchise, particularly in large and growing metro areas, such as Houston,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “The brand has grown market share 39% in the US since 2019, more than any other non-luxury franchise and its sales per franchise now surpass Honda, Subaru and Hyundai. Not surprisingly, buyer demand for the franchise has skyrocketed as evidenced in this transaction.”

According to the 2022 Kerrigan Advisors’ Dealer Survey, Kia had the highest expected valuation gain of all franchises: close to half (46%) of dealers surveyed expected the franchise to increase in value, surpassing Toyota and Hyundai for the first time. “We expect buyer demand for Kia franchises to grow throughout 2023, thanks to strong satisfaction among dealers, a refreshed lineup of vehicles, and the return of customer incentives as inventory increases,” continued Erin Kerrigan.

Owners John Beck and James Masten began their association in 1971, selling cars together at a local Chevrolet dealership. That partnership would eventually expand into ownership, first with a wholesale company, and, over the years, a long list of successful dealerships. Over the last four decades, Beck & Masten Auto Group has been honored with Dealer of the Year Awards, Mark of Excellence Awards, and more — all thanks to their focus on premier customer service and excellent employee relations.

“The success of Kia in greater Houston shows how the area has grown, along with the value of the franchise,” said James Masten, co-owner of Beck & Masten Auto Group. “With Kia, we saw an opportunity to invest in the brand and grow its footprint, for both new car sales and fixed operations. So, when it came time to sell it was incredibly important to find a buyer who could continue to invest in and nurture this emerging brand. This is why we turned to Kerrigan Advisors who has the experience and know-how, in both the Texas market and with Kia, to complete a transaction as important as this one.”

“It’s hard enough to sell a dealership that has a proven track record over decades of sales and service, but when a dealership is beginning to grow into its revenue potential like our Kia dealership, that’s even more complicated,” said John Beck, co-owner of Beck & Masten Auto Group. “Add to that the changing dynamics of the Texas automotive market — especially it’s incredible growth — and it was clear to us that Kerrigan Advisors was the only sell-side advisor with the expertise to make this transaction a success for all involved.”

Texas is the 2nd largest auto retail market in the nation, representing 9% of total US light vehicle sales. It is also among the most attractive to franchise buyers due to the state’s high sales per rooftop (6th highest in the nation) and 41% increase in light vehicle registrations since 2001.

“It was a pleasure to represent John Beck and James Masten in this transaction. Just as they did with their large Buick GMC stores, they successfully built the Kia franchise in northwest Houston,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “This project underlines the tremendous strides that Kia has made with respect to product line, brand, and penetration of the American heartland. Kia is now squarely on the map as a desirable franchise throughout the United States.”

Kerrigan Advisors has sold seven dealerships in Texas in 2023, making the firm the most active advisor in the state, as well as the most active sell-side advisor on larger transactions in the auto retail 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.

Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, which includes Kerrigan Advisors’ signature blue sky charts, multiples, and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases monthly The Kerrigan Index™ composed of the seven publicly traded auto retail companies with operations focused on the US market. The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here. To read the 2022 Kerrigan Dealer Survey, click here. Kerrigan Advisors also is the co-author of NADA’s Guide to Buying and Selling a Dealership.

About Kerrigan Advisors

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

Kerrigan Advisors Media Contact:

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

Sale of Texas Buick GMC dealerships highlights strong demand for top volume franchises in states with favorable business environments and marks Kerrigan Advisors’6th dealership sale in Texas in 2023

Incline Village, NV – May 12, 2023 – Kerrigan Advisors, the premier sell-side advisor and thought partner to auto dealers nationwide, represented Houston, Texas-based Beck & Masten Auto Group in the sale of Beck & Masten Buick GMC North, Buick GMC South and Buick GMC Coastal Bend to Houston, Texas-based Group 1 Automotive (NYSE: GPI). This marks the 184th, 185th and 186th dealership sale transaction led by Kerrigan Advisors since 2015. Beck & Masten is a dominant auto group in Houston and Corpus Christi, retailing more than 11,700 vehicles in 2022 and representing more than one third of Buick GMC sales in the Houston MSA. The dealerships are amongst the highest volume Buick GMC franchises in Texas and the US, ranking as the #1 Buick GMC dealer in Texas for 22 consecutive years and the #1 Buick GMC dealer in the US six times.

Owners John Beck and James Masten first met at a Houston Chevrolet dealership in 1971, and subsequently partnered to start a successful wholesale company. Eight years later, the pair purchased Pontiac GMC in Tomball, Texas. The dealership was eventually relocated to Houston and is now called Beck & Masten Buick GMC North. The dealership has since won the Dealer of the Year Award 13 times from General Motors, a recognition of its decades-long accomplishment as one of the highest volume Buick GMC dealerships in the country. The success of Beck & Masten Buick GMC North brought about Beck & Masten Buick GMC South in 2000, which also grew into one of the top-performing domestic dealerships in Houston and Texas. Buick GMC South has been recognized with multiple Mark of Excellence and Dealer of the Year awards — success that has come about due to their focus on premier customer service and excellent employee relations.

“Beck & Masten has been an important auto retailer in the Houston market for decades, and we were honored to represent John Beck and James Masten, as well as their families, in this big decision,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “They've been partners for 50 years, and built very impressive market share for Buick GMC in the region. Group 1 Automotive has added a substantial domestic group to their Houston platform.”

“John and I have spent the majority of our adult lives building this business, and the decision to retire was a huge one for us,” said James Masten, co-owner of Beck & Masten Auto Group. “It was incredibly important that this be done right, for my family and for the families of our employees. I knew we needed to go with the best in the industry when it came to representing our sale, and it did not take long to figure out that Kerrigan Advisors was the best. When it comes to getting big transactions done, they have the most experience. They guided us along the way and led us to a great outcome.”

“We have spent our careers building dealerships, not selling them. James and I wanted an advisor exclusively focused on selling dealerships like ours,” said John Beck, co-owner of Beck & Masten Auto Group. “It's been a real pleasure to work with the professionals at Kerrigan Advisors throughout the sale process. We needed their guidance, and they expertly gave it to our families throughout the transaction process ensuring the sale was a success for all involved.” 

“We always appreciate the opportunity to work with leading Texas dealers like Beck & Masten,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “This transaction demonstrates that the Texas market is one of the best in the country. There is incredible buyer demand for top volume franchises in the Lone Star State, given its highly favorable business climate, population growth and quality of life. We expect to see a disproportionate share of the 2023 US buy/sell market take place in Texas.”

Texas is the 2nd largest auto retail market in the nation, representing 9% of total US light vehicle sales. It is also among the most attractive to franchise buyers due to the state’s high sales per rooftop (6th highest in the nation) and 41% increase in light vehicle registrations since 2001. Notably, Beck & Masten’s three Buick GMC dealerships have an 8% market share for Buick GMC sales in Texas.

Kerrigan Advisors has sold six dealerships in Texas in 2023, making the firm the most active advisor in the state, as well as the most active sell-side advisor on larger transactions in the auto retail 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 valuation analysis, creating value at every stage of the auto retail lifecycle. 

Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, which includes Kerrigan Advisors’ signature blue sky charts, multiples, and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases monthly The Kerrigan Index™ composed of the seven publicly traded auto retail companies with operations focused on the US market. The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here. To read the 2022 Kerrigan Dealer Survey, click here (https://www.kerriganadvisors.com/the-kerrigan-dealer-survey/). Kerrigan Advisors also is the co-author of NADA’s Guide to Buying and Selling a Dealership.

About Kerrigan Advisors

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

Kerrigan Advisors Media Contact:

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

Kansas City luxury dealership sold to Baxter Auto Group; Transaction marks 183rd dealership sold since 2015 by Kerrigan Advisors, the premier sell-side dealership advisor to top luxury dealerships in growth markets

INCLINE VILLAGE, NV – May 9, 2023 – Kerrigan Advisors, the premier sell-side advisor and thought partner to auto dealers nationwide, represented Holman, a global automotive services organization, in its sale of Audi Shawnee Mission to Omaha, Nebraska-based Baxter Auto Group. The dealership, newly built in 2016, is the highest volume Audi dealership in the Kansas City MSA, a growing market with a strong economy and a highly educated workforce. It is also the 5th highest volume luxury dealership in the greater Kansas City metro area.

“We were honored to assist Holman in the strategic sale of its Audi franchise in Kansas City,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “Knowing Holman’s commitment to community, creating a positive workplace and providing exceptional customer service, it was essential to identify a buyer that shared these key values. We found that in Baxter Auto Group who proved to be the perfect fit.”

For nearly a century, Holman has applied a standard of excellence to its business, growing from a single Ford dealership in 1924 into the 26th largest dealership group by 2022 new unit sales in the United States. Today, Holman owns twenty eight dealerships in eight states under twenty brands and six major divisions in the U.S., Canada, the U.K., and Europe. Like Holman, Baxter Auto Group is a family-owned enterprise led by Mickey Anderson. Founded in 1957, Baxter is currently the 33rd largest U.S. dealership group and serves communities in Nebraska, Kansas, and Colorado.

“Holman is pleased to be passing Audi Shawnee Mission’s keys to another family-owned company, one whose values, like ours, start with commitment to their community and employees,” said Gene Welsh, President, Retail Automotive for Holman. “With this transaction, we believe we are putting the Audi Shawnee Mission team in a better position for growth with Baxter who operates a number of premier dealerships in the region. We could not be more pleased with Kerrigan Advisors to have found an ideal buyer for Audi Shawnee Mission. Erin and her team kept our strategic objectives at the forefront during every stage of the sale process and shepherded this transaction to a successful outcome.”

“Audi is a growth franchise with a strong product lineup, and it’s particularly strong in the Central Region,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “We continue to see buyers shifting their investments to high growth, less risky franchises, particularly where they can build out a regional footprint in a more meaningful way as Baxter is doing in Kansas City. This transaction is further evidence that the best dealerships in the fastest growing, most business-friendly markets will see robust interest from buyers in 2023,” continued Ryan Kerrigan.

A growth brand, Audi has nearly doubled its US light vehicle market share since 2008; as of September 2022, the brand’s market share in the Central Region was up 2.3% — significantly outperforming its top luxury competitors. The Audi Shawnee Mission dealership is in Johnson County, the most populous and fastest growing county in the state, and where the highest volume top luxury dealerships in the Kansas City are located. The larger Kansas City metro area has grown 19% since 2000, nearly 10% higher than the U.S. and with a thriving economy: more than 46% of households boast annual incomes that are 6% higher than the U.S. average.

Kerrigan Advisors is the most active sell-side advisor on larger transactions in the auto retail industry, achieving the highest sale price per client of any firm over the last five years. The firm attributes its success to its team’s laser-focus on fulfilling each client’s personal and professional goals. In addition to its sell-side advisory work, the firm offers strategic consulting services to dealers and their families, including growth planning, capital raising and valuation analysis, creating value at every stage of the auto retail lifecycle. 

James M. Kearney and Tyler J. Runsten of Stoel Rives LLP served as legal counsel to Holman. Don Erftmier, Jr. of Erftmier Law, LLC served as legal counsel to Baxter.

About Kerrigan Advisors

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

Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, which includes Kerrigan Advisors’ signature blue sky charts, multiples, and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases monthly The Kerrigan Index™ composed of the seven publicly traded auto retail companies with operations focused on the US market. The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here. To read the 2022 Kerrigan Dealer Survey, click here. Kerrigan Advisors also is the co-author of NADA’s Guide to Buying and Selling a Dealership.

Kerrigan Advisors Media Contact:

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

Kinsel Toyota and Kinsel Ford, Lincoln, Mazda of Beaumont sold to Doggett Automotive Group; Transaction marks 182nd dealership sold since 2015 by Kerrigan Advisors, the premier sell-side dealership advisor to higher value dealerships and dealership groups

Incline Village, NV – May 2, 2023 – Kerrigan Advisors, the premier sell-side advisor and thought partner to auto dealers nationwide, represented Beaumont, Texas-based Kinsel Motors in its sale of Kinsel Toyota and Kinsel Ford, Lincoln and Mazda to Houston, Texas-based Doggett Automotive Group. Kinsel Motors recently celebrated its 100th anniversary of being in business in Texas and has been a mainstay in Beaumont since 1944.

“We were honored to work with the Kinsel family to identify a buyer to continue their family’s long legacy of exceptional customer service in Beaumont, Texas,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “The Kinsel family has served this auto retail market for over a century. The success of their dealerships, some of the highest volume in Southeast Texas, drove tremendous buyer demand, with Doggett ultimately being the best match for the family. Our team is very fortunate to work with exceptional dealer families, like the Kinsels, to ensure their personal and financial goals are paramount and most importantly achieved in a once-in-a-generation sale.”

“For four generations, Beaumont residents have counted on Kinsel Motors to help them buy and service their vehicles,” said Joe Bob Kinsel, co-owner of Kinsel Motors. “It has been our privilege to build something special here in Beaumont and the Southeast Texas community. We’re grateful to the community, and honored to have received so much friendship and support for the past 80 years.”

“Having this generational connection to Beaumont meant that getting this transaction right was the most important thing for our family,” continued Kinsel. “The Kerrigan Advisors team, particularly Erin Kerrigan, Marie Brashears and Mercedes Hendricks, were some of the most professional people we have ever worked with in our careers. Their attention to detail and tremendous commitment to their clients are what make them the best in the business.” 

“It’s been a privilege to manage and lead so many loyal and hardworking employees at Kinsel Motors,” said Craig Kinsel, President of Kinsel Motors. “The secret to our success is no secret — it has always been the people who come to work every day and provide stellar customer service. So, when it came to the mechanics of the deal, the guidance we received from Kerrigan Advisors was a critical factor in our success. While selling our business was a hard decision, choosing Kerrigan Advisors to represent us made it a much easier one. The process could not have gone smoother with Kerrigan leading the way.”

Texas is the 2nd largest auto retail market in the nation and generates the 4th highest revenue per dealership averaging $93 million in 2022, 30% higher than the national average. It is consistently the 2nd most requested state in Kerrigan Advisors’ buyer database and is arguably the most attractive in the nation given its high sales per rooftop and impressive growth. In 2022, Texas dealerships accounted for nearly 10% of total US dealership revenue.

“The Texas market remains in high demand by dealership buyers and this transaction shows how active the buy/sell market is for volume dealerships in high-growth, business-friendly areas. Texas is one of the largest economies in the world, and continues to experience above average population and economic growth,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “As a result, buyer demand for Texas dealerships continues to outstrip supply, resulting in top valuations for dealerships in the state.”

Kerrigan Advisors is the most active sell-side advisor on larger transactions in the auto retail industry, achieving the highest sale price per client of any firm over the last five years. The firm attributes its success to its team’s laser-focus on fulfilling each client’s personal and professional goals. In addition to its sell-side advisory work, the firm offers strategic consulting services to dealers and their families, including growth planning, capital raising and valuation analysis, creating value at every stage of the auto retail lifecycle. 

Stephen Dietrich and Sarah Seedig of Holland & Knight served as legal counsel to the seller. Monica Hoenshell of Calvert Law Firm served as legal counsel to the buyer.

About Kerrigan Advisors

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

Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, which includes Kerrigan Advisors’ signature blue sky charts, multiples, and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases monthly The Kerrigan Index™ composed of the seven publicly traded auto retail companies with operations focused on the US market. The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here. To read the 2022 Kerrigan Dealer Survey, click here. Kerrigan Advisors also is the co-author of NADA’s Guide to Buying and Selling a Dealership.

Kerrigan Advisors Media Contact:

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