Positive momentum in auto retail and buy/sell market will continue in 2022, according to the recently-released 2021 Kerrigan Dealer Survey: 61% of dealerships expect an increase in their valuation, 79% expect profits to rise and 77% expect to acquire more dealerships over next 12 months

Incline Village, Nevada, November 29, 2021 – Auto dealers’ optimism about the valuation of their dealerships has doubled year-over-year, according to the newly-released, 2021 Kerrigan Dealer Survey, with the vast majority expecting their already record profits to continue to rise in 2022. 

The survey, which was fielded by Kerrigan Advisors, is designed to gauge auto dealer sentiment about the future value of their businesses, as well as their perspective on franchise valuations and acquisitions. Sentiments about the year ahead, from the 825 dealers queried, align closely with Kerrigan Advisors’ prediction that the 2022 dealership M&A market will surpass 2021’s record pace and that valuations will rise further for most franchises over the next twelve months. 

Sixty-one percent of dealers expect an increase in the value of their dealership/dealership group in the next 12 months, nearly double last year’s results. Only 6% expect a decline. The survey also produced overwhelming evidence of just how bullish today’s auto dealers are: 94% expect their profits to continue, and 79% expect them to rise even further. 

“The ongoing momentum in auto retail is truly extraordinary and underscored by the fact that dealers expect their profits, already up over 150%, to continue to rise,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “These survey results offer compelling evidence of the strength of the auto retail business model, despite inventory challenges and electrification risk. Dealers have re-engineered their businesses to thrive with modest vehicle supplies and deployed digital technologies to enhance productivity. Their bullish perspective on the value of their businesses certainly is a vote of confidence in the sustainability of today’s high profits going into 2022.” 

In the survey, seventy-seven percent of dealers said that they were anticipating acquiring one or more dealerships in the next twelve months, while just 3% plan to sell one or more dealerships.

“The industry’s focus on expansion is indicative of the scale required to succeed in the current auto retail marketplace and is consistent with today’s high level of M&A activity,” continued Kerrigan. “It also shows dealers are looking to reallocate their profits back into the industry because they believe in its future. As more dealers seek to grow than exit, Kerrigan Advisors expects 2021’s seller’s market to persist into 2022, driving valuations even higher next year, consistent with our survey results.”

Earlier this year, Kerrigan Advisors’ Q2 2021 Blue Sky Report showed that blue sky values had risen more than 40% versus pre-pandemic levels, consistent with the findings in the 2021 dealer survey. 

Dealers also shared their opinions about the direction of specific franchise values over the next 12 months, pointing out potential winners, as well as franchises they felt would remain consistently valued – or suffer a decline.

Over 40% of surveyed dealers expect an increase in Toyota, Hyundai, Kia, Subaru, Honda, Lexus, and Porsche franchise values in the next 12 months.  Infiniti, Acura, Nissan, and Lincoln fared less well with 30% of surveyed dealers expecting their valuations to decline, although that is an improvement over last year’s 55%. Kia and Hyundai were the franchises with the highest percentage point improvement over last year (23 percentage points) from last year in expectation of rising valuations.

“The industry’s explosive profitability and positive earnings expectations for 2022 are driving dramatic changes in valuation expectations for most franchises compared to prior years,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “Of particular note is how the survey highlights the value of the Toyota franchise, with 55% of dealers expecting that franchise to increase in value, despite already being one of the most valuable franchises in the market. This is reflective of Toyota’s partnership business model with its dealers and the importance of that partnership as the industry enters a period of evolution with electrification and digital retailing.”

Additional Franchise Valuation Highlights from the 2021 Kerrigan Dealer Survey:

·       Projected increases in franchise values are higher on average for Toyota, Hyundai, Kia, Subaru, Honda, Lexus, and Porsche in 2021 versus 2020, when no franchise achieved greater than 40% of dealers projecting an increase.

·       Toyota was the franchise most expected to increase in value by dealers at 55%.

·       Lexus ranked highest among luxury franchises, with 43% of dealers projecting a value increase.

·       Hyundai and Kia saw a 16-percentage point decrease in the number of dealers who expect their franchises to decline in value, versus 2020.

·       Ford improved 17-percentage points in the number of dealers who expect the franchise to increase in value; greater than Chevrolet and CJDR.

·       The top 5 franchises projected to increase did not include a luxury franchise for the first time, potentially due to increased competition from Tesla in the luxury segment.

·       The top 5 franchises projected to decrease – Infiniti, Acura, Nissan, Lincoln, and Cadillac – saw an 18-percentage point reduction in the number of dealers expecting their valuation to decline vs 2020’s survey.

·       Infiniti was the franchise most expected by dealers to decline in valuation at 55%.

Methodology

The data for The Kerrigan Dealer Survey is 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 825 responses from franchised auto dealers in Kerrigan Advisors’ proprietary dealer database. Survey responses were collected from June 2021 to October 2021.

·       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 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 11 Top 150 Dealership Groups in the US, more 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

Priority 1 sale marks the 21st group sale Kerrigan Advisors has represented since 2015

Incline Village, NV – November 11, 2021 – Kerrigan Advisors represented Baltimore, Maryland-based Priority 1 Automotive Group in its sale to AutoNation on November 8, 2021. The acquisition is one of the largest completed by AutoNation since 2018, and the largest on record in the Mid-Atlantic region. Kerrigan Advisors, which focuses exclusively on sell-side representation, is the most active sell-side advisor on larger transactions in the auto retail industry.

The sale included Porsche Towson, BMW of Rockville, BMW of Towson, BMW of Bel Air, MINI of Baltimore County, Jaguar Land Rover Hunt Valley, Audi Owings Mills, Acura of Hunt Valley and Frankel & Chesapeake Cadillac, as well as three collision centers located in Cockeysville/Hunt Valley, Rockville, and Towson.

“Kerrigan Advisors was the only buy/sell advisor I considered when my family decided the time was right for a sale. I have known Erin Kerrigan and her team for a long time and have always been impressed by their professionalism and hard-work on behalf of clients,” said Lou Cohen, President of Priority 1 Automotive Group. “Kerrigan’s expertise selling large multi-dealership groups like ours, combined with their keen understanding of the most active buyers in the industry, is the kind of intelligence that is critical in today’s buy/sell market. Kerrigan Advisors brought that to our transaction process, and more.” 

Prior to the transaction, AutoNation owned six dealerships in the Baltimore-Washington market. After the completion of this transaction, AutoNation will own over 40% of the luxury dealerships in the Baltimore market.

“We were honored to represent the Cohen family in the sale of their very valuable dealership group to AutoNation. This transaction was a natural fit for our firm, given our expertise in managing the complexities associated with large multi-dealership transactions and our knowledge of the Mid-Atlantic, where we maintain an office,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “We were grateful for the opportunity to identify a buyer who would continue the Cohen’s legacy of customer and community service in the Baltimore-Washington market.”

Priority 1 serves the Baltimore-Washington area, which is the 4th largest US region by population, with over nine million residents, and one of the most educated, high income-earning regions in the country.  Lou Cohen has led auto retail businesses in Baltimore-Washington since 1961 and has a record of success in the market. In 1979, Cohen acquired his first new car franchise, ABC Chevrolet, and ultimately added nine more franchises to his Heritage Auto Group before selling that group in 1997. In 2000, Cohen re-entered the new car business with the purchase of BMW of Towson, adding an additional eight top luxury franchises in the Baltimore-Washington market to become one of the largest luxury group’s in the Mid-Atlantic. After the sale, the Cohen family will continue to operate a leasing business and used car operation.

“Our family legacy in auto retail in Baltimore goes back to the 60s, so we did not take this sale process lightly,” said Marc Cohen, Vice President of Priority 1 Automotive Group. “With Kerrigan Advisors’ expert advice, knowledge of the top buyers for the Mid-Atlantic region and focus on exclusive sell-side representation, we were in excellent hands throughout the sale process. Their advice and guidance was invaluable.”

“Our family has grown Priority 1 strategically, adding the best luxury franchises to enhance the value of our group and better serve our luxury customer base in the Baltimore-Washington market,” said Alison Cohen, Vice President of Priority 1 Automotive Group. “Kerrigan Advisors understood the value of our luxury platform, including our group’s potential, and found the right buyer for us in AutoNation.”

“AutoNation’s purchase of Priority 1 continues the trend of the largest consolidators increasing their market share in major metros throughout the US, a trend that is not abating,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “We expect 2022 to be as active a year as 2021, with more families, like the Cohens, deciding the time is right to monetize generations of hard work.”

Stephen Dietrich of Holland & Knight and Freddie J. Traub of Friedman & Friedman, LLP served as legal counsel to Priority 1 Automotive Group.

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

Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, which includes Kerrigan Advisors’ signature blue sky charts, multiples, and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases monthly The Kerrigan Index™ composed of the seven publicly traded auto retail companies with operations focused on the US market. The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here. To read the 2020 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 a leading sell-side advisor and thought partner to auto dealers in the US. The firm advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses. Kerrigan Advisors has represented on some of auto retail’s largest transactions and advised 11 Top 150 Dealership Groups in the US, more 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

Auto dealership buy/sell market on path to most active year in history – 320 transactions June 2020 to June 2021 – as limited inventory and more efficient practices send dealership profits soaring 164%; historic access to capital fuels demand, and blue sky valuations tick up more than 40% from pre-COVID levels.

Incline Village, NV - September 20, 2021 – The auto dealership buy/sell market has hit yet another historic high, with 320 transactions completed in the 12-month period since the economy re-opened in June 2020, according to the Second Quarter 2021 Blue Sky Report® by Kerrigan Advisors, the industry authority on dealership valuation and buy/sell trends. Mostly driven by today’s unprecedented dealership profits, values for auto dealerships were at record levels, reaching an average of $9 million of blue sky per dealership for Q2, with 2021 on track to be the most active buy/sell year in history.

There were 144 dealership buy/sell transactions in the first half of 2021, a 27% increase over the first half of 2020 and a record number for the period[1]. Kerrigan Advisors expects transaction activity to rise dramatically in the second half of the year as more sellers seek to complete their transaction before year-end to potentially lock in a lower tax rate and avoid a tax increase in 2022.

“Today’s activity level is a byproduct of the industry’s explosive profitability,” said Erin Kerrigan, Founder & Managing Director of Kerrigan Advisors, noting that in the first half of 2021, the average dealership earned a jaw-dropping $1.96 million, 164% more than the industry’s average between 2015 and 2019, with the average dealership achieving a record trailing-twelve month profit of $3.51 million.

“Even with the removal of PPP funds received in 2021, most dealerships are achieving profitability levels several times higher than historical averages. Dealerships currently provide an incredibly high ROE of over 57% on average, and dealers have more capital than they have ever had. This is fueling buyer demand that is well outstripping supply and creating a seller’s market, further heating up the market and increasing blue sky values,” said Kerrigan.  

The report also discusses the impact of the semiconductor chip shortage that continues to limit the supply of new vehicles. With the resurgence of COVID cases further disrupting the entire auto industry’s supply chain and impacting inventory availability and pricing, new and used vehicle prices are up 10.6% and 29.6% respectively since January 2020, the largest rise in an 18-month period.

Intersecting with these factors, according to the report, is robust consumer demand for new and used vehicles, spurred by access to quarantine savings and government stimulus, low borrowing costs and a growing appreciation for the safety and importance of personal mobility. This, combined with dealerships’ increasingly productive and efficient business operations, is leading to record gross profits per vehicle: more than double for new compared to pre- pandemic levels, with used vehicle gross profit per vehicle rising 79%. 

“Given the industry’s incredible profit performance over the last 12 months, and positive outlook for 2022 and beyond, we find most dealers are buyers, not sellers, and few are willing to accept the status quo,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “Today’s dealers, both private and public, want to grow and have tremendous access to capital to do so.  Few alternative investments provide the risk adjusted returns available from dealership acquisitions.”

OEM Approval Process Increasingly Sluggish

A significant trend potentially impacting blue sky multiples, according to the Blue Sky Report, is the slow-paced OEM approval process as OEMs are inundated with transactions. Increasingly, OEMs are requiring more terms from buyers, including more stringent framework agreements and facility upgrades. 

“We expect the challenges of OEM staffing on buy/sell approvals to become a crisis issue in the fourth quarter, given the economic fallout of missing a 2021 close,” said Erin Kerrigan “The old adage ‘time kills deals’ is still alive and well. OEMs that take too much time to approve their buy/sells and subject the process to unnecessary red tape and restrictions will likely find a larger number of their buy/sells fall apart, ultimately leading to less buyer demand and potentially lower blue sky multiples for their franchises.”

Multiple Outlook Adjustments – CDJR, Nissan Up, Ford Down

Kerrigan Advisors did not adjust blue sky multiples in Q2, but did make changes to the outlook for certain franchises due to fluctuations in buyer demand. Chrysler Dodge Jeep Ram (CDJR)’s multiple outlook was upgraded from Steady to Positive. “Buyer demand for CDJR is on the rise as Stellantis defies the odds with higher vehicle inventory levels, resulting in impressive sales gains (32.4%) in the first half of 2021 and high sales per franchise (787 sales per franchise) in the last twelve months,” said Ryan Kerrigan.

Nissan’s multiple outlook was also upgraded, from Steady to Positive. “We expect to see an increase in Nissan’s multiples by the end of 2021,” continued Kerrigan. “Nissan franchises improved in sales and profitability this year with buyers once again interested in acquiring Nissan franchises, particularly in strong, high growth markets such as Florida, Texas, and Nevada. We saw this firsthand when Kerrigan Advisors represented on the sale of Fuccillo Nissan of Clearwater, Florida to Morgan Auto Group in August 2021.”

Kerrigan Advisors had one multiple outlook downgrade for the quarter, moving Ford from Steady to Negative.  “Buyer demand for Ford dealerships is on the decline, relative to its domestic competitors. Ford sales rose significantly less than its top competitor and dealers are skeptical of the ramifications for future dealer profitability of its imminent shift to a build-to-order model,” concluded Kerrigan.

2021 Buy/Sell Trends

Kerrigan Advisors identified the following three trends it expects to meaningfully shape the buy/sell market for the remainder of 2021 and into 2022.

·      Buyer pool of existing dealers expands as cash accounts rise and access to debt grows

·      Sellers become less flexible on valuation as their profits soar

·      OEMs are increasingly overwhelmed by 2021’s buy/sell volume and less flexible on framework terms

Highlights from the Q2 2021 Blue Sky Report® by Kerrigan Advisors include:

·      144 transactions were completed in the first half of 2021, a 27.4% increase over the first half of 2020 and a record number for the period.

·      320 transactions were completed over the last 12 months (June 2020 to June 2021), more than any 12-month period in recent history.

·      Including real estate, the average dealership’s enterprise value is approaching $21M, a 19% percent increase over 2019.

·      There were 51 multi-dealership transactions in the first half of 2021, a 96% increase as compared to 2020, representing 35.4% of the buy/sell market -- the highest percentage ever recorded during the first half of the year.

·      Average dealership blue sky values rose to another peak in the second quarter to $9M, up 42% from 2019.

·      More efficient business operations and higher gross profits contributed to increased dealership profits in the first half of 2021— an average of $1.96 million, more than any pre-pandemic 12-month period, leading to a trailing-twelve month profit of $3.51 million, 147% more than the pre-COVID average (2014-2019).

·      The Kerrigan Index™ continues to outperform S&P 500—up 1038% since 2009, outperforming the S&P 500 by 179%.          

·      Import franchises represent a disproportionate share of the buy/sell market at a combined 58% (41% non-luxury and 17% luxury), relative to their franchise 31% market share of just 34%.

·      The public auto retailers continued to allocate capital to acquisitions, spending a record $4.45 billion over the last four quarters.

·      In the first half of 2021, Toyota represented over 10% of the franchise buy/sells, in line with Ford’s, CDJR’s and Chevrolet’s buy/sell market share - impressive when considering that Toyota has only 1,238 franchises in the US, as compared to Ford’s 3,006, CDJR’s 2,461, and Chevrolet’s 2,924.

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

Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report of dealership buy/sell activity and franchise values, received by nearly 10,000 industry participants in 35 countries. To register to receive The Blue Sky Report®, click here. Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly report tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here.

Kerrigan Advisors Media Contact:

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

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

Sale of Earnhardt Kia and Rodeo Hyundai marks 11th Top 150 Dealership Group Kerrigan Advisors has advised since 2015

INCLINE VILLAGE, NV – September 2, 2021– Kerrigan Advisors represented Earnhardt Auto Centers in the sale of Earnhardt Kia in Phoenix, Arizona and Rodeo Hyundai in Surprise, Arizona to Ken Garff Automotive Group. These transactions are Ken Garff’s first dealership acquisitions in the Arizona market. A long-time fixture in the western US, Earnhardt Auto Centers was named by Automotive News as the 23rd Largest Dealership Group in the US by 2020 new unit sales.  Notably, this transaction marks the 11th top 150 dealership group advised by Kerrigan Advisors since 2015.   

The sale of Earnhardt Kia and Rodeo Hyundai are the 2nd and 3rd dealerships sold by Kerrigan Advisors in the Phoenix market in just the last 12 months, making the firm the most active sell-side advisor in the area today (Kerrigan Advisors sold Bell Road Toyota in October 2020 to Lithia).   

“We were pleased to advise Earnhardt Auto Centers, one of the nation’s leading dealership groups, in the sale of their valuable Kia and Hyundai franchises,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors.  “Earnhardt has built one of the strongest names in the Arizona market based on a reputation of exceptional customer and employee service, instilled by its founder Tex Earnhardt.  It was important to find a buyer with the same family focus and one who would continue the Earnhardt’s legacy of caring for their customers and their employees.”

“Kerrigan Advisors identified the perfect buyer for our stores, one that appreciated the value of entering the Phoenix market with great import brands,” said Hal Earnhardt, Co-Owner of Earnhardt Auto Centers. “Kerrigan Advisors was critical to the success of this transaction.  We are very pleased to know these dealerships will be run by another family-owned and operated dealership group with the same customer service focus and appreciation for employees.”

“Kerrigan Advisors was instrumental to this transaction,” concurred Brett Hopkins, Chief Executive Officer of Ken Garff Automotive Group, one of the largest family-owned dealership groups in the US. “Erin and her team do an incredible job working with their clients to make sure the sale process runs smoothly.” 

“This transaction is a convergence of two important trends in the buy/sell market: overall demand for Kia/Hyundai franchises and a booming auto retail market in Arizona, where dealerships achieve some of the highest revenue per franchise in the country,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors.  “These two dealerships represented an exceptional opportunity for Ken Garff to enter the high growth Phoenix market with some of the fastest growing brands in the industry,” noting that Kerrigan Advisors upgraded the multiple outlooks for both brands in Q4 2020 in its quarterly Blue Sky Report.

“The car business has been in our family for generations, going all the way back to our grandfather, Tex, who moved to Chandler as a young man in 1951,” said Dodge Earnhardt. “Tex was a legend, and he built a legendary business based on ‘no bull’ business practices that we still follow to this day. We were very appreciative of the high level of client service we received from Kerrigan Advisors because they share that same straightforward, personal approach to their work on behalf of their dealer clients.”

“Tex used to say, ‘Treat everyone the way you would treat your mama!’” said Derby Earnhardt. “That’s exactly what Kerrigan Advisors did for us during a complex transaction involving two dealerships and a buyer who was new to the Phoenix market.  We would recommend them to any dealer considering a sale in today’s active buy/sell market.”

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

Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, which includes Kerrigan Advisors’ signature blue sky charts, multiples, and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases monthly The Kerrigan Index™ composed of the seven publicly traded auto retail companies with operations focused on the US market.  The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here. To read the 2020 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 a leading sell-side advisor and thought partner to auto dealers in the US.  The firm advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses.  Kerrigan Advisors has represented on some of auto retail’s largest transactions and advised 11 Top 150 Dealership Groups in the US, more 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 nearly 10,000 industry participants in 35 countries.  To register to receive The Blue Sky Report®, click here (https://www.kerriganadvisors.com/the-blue-sky-report).  Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly index tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here (http://www.kerriganadvisors.com/the-kerrigan-index/). To read the 2020 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.

Kerrigan Advisors’ Founder and Managing Director, Erin Kerrigan, is a recognized expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, Automotive News’ Canadian World Congress, AICPA, and NADC. She has also been quoted numerous times by The Wall Street Journal, CNBC, Bloomberg and The Economist and has been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Bank of America, Ohio Automobile Dealer Association, and SunTrust Bank. Erin Kerrigan was named by Auto Remarketing as one of the leading women in Automotive in 2020.  Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News.

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

Florida dealership sold to Morgan Auto Group, marking the 121st Kerrigan-led dealership sale since 2014

Incline Village, NV - August 23, 2021 – Kerrigan Advisors, a leading sell-side advisory firm and thought leader to auto dealers in the US, represented and advised Fuccillo Automotive Group in its sale of Fuccillo Nissan of Clearwater to Florida’s Morgan Auto Group. With this transaction, Kerrigan Advisors has sold five Florida dealerships on behalf of the Fuccillo family since December 2019.  The sale of Nissan of Clearwater is the 121st dealership sale led by the Kerrigan Advisors team since 2015 and the firm’s 9th dealership sale in Florida in the last 28 months, cementing Kerrigan Advisors’ position as the most active advisor in the state.

Fuccillo’s dealerships have built a commanding reputation in the highly sought-after Florida car market. Fuccillo Nissan of Clearwater is located in the Tampa metropolitan area, one of the top 10 fastest growing markets in the US, and operates in a new, state-of-the-art facility in South Clearwater’s auto row on US Hwy19, a major retail thoroughfare. The acquirer, Morgan Auto Group, is one of the largest dealership groups in Florida with 46 retail locations in Tampa, Gainesville, Ocala, Lake City, Jacksonville, Sarasota, Naples, Fort Myers, Brandon, New Port Richey, Orlando, and the surrounding areas.

“This was a match that just made sense.  Our goal was to make sure that Nissan of Clearwater continued to serve the community with the highest of standards, and Morgan Auto Group’s deep roots in Florida, and superlative record, should ensure just that,” said Billy Fuccillo Jr., President of Fuccillo Automotive Group. “Once again, Kerrigan Advisors demonstrated their strategic expertise and comprehensive knowledge of our market with another seamless transaction.”

Previously, Kerrigan Advisors represented and advised Fuccillo Automotive Group in its sale of Fuccillo Kia of Cape Coral and Fuccillo Kia of Port Charlotte in Southwest Florida to LMP Motors, and of Fuccillo Nissan of Orange Park and Fuccillo Kia of Wesley Chapel to Morgan Automotive Group. 

“From our prior work with the Fuccillo group, we knew the importance of the relationship between the Fuccillos and the Florida communities they serve, as well as the significance of their legacy in the state. We are proud to have had the opportunity to preserve that legacy as we shepherded the group through another successful transaction in today’s dynamic auto retail buy/sell market,” said Gabe Robleto, Vice President of Kerrigan Advisors.  

Florida is a highly sought-after state by buyers due to its high population growth, thriving economy, lower taxes and high revenue per dealership - the 2nd highest in the US.

“The Florida auto retail market is incredible, and certainly among the best in the United States. As evidenced by this transaction, all franchises in Florida can generate significant profits, strong buyer demand and, ultimately, high valuations,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “It has been our pleasure to work with the Fuccillo family over the last several years to monetize their decades of hard work. Working with dealer families, and helping them make generational planning and legacy decisions, is one of the most fulfilling parts of our work at Kerrigan Advisors. We have been honored to do this for the Fuccillo family.”

To contact Kerrigan Advisors, the most active sell-side advisor on larger transactions in the auto retail industry, click here.

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

Transaction marks 119th Kerrigan-led dealership sale since 2014

INCLINE VILLAGE, NV – July 28th, 2021– Kerrigan Advisors, a leading sell-side advisory firm to auto dealers in the U.S., represented owner Ron Bubar in the sale of Grand Junction Subaru and Grand Junction Volkswagen in Grand Junction, Colorado to Sonic Automotive (NYSE: SAH).

The transaction marks the 118th and 119th dealership sale that Kerrigan Advisors has advised on in just the last six years, making the firm today’s most active sell-side advisor to the highest value transactions in auto retail. This transaction illustrates Kerrigan Advisors’ success in representing the highest quality clients nationwide, extending from individual dealerships to Top 150 dealership groups and the firm’s ability to leverage its robust, proprietary buyer database to identify the best buyer for each client. 

“Having the opportunity to represent quality dealerships like Grand Junction Subaru and Grand Junction Volkswagen was an honor for our team,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “Grand Junction Subaru has been the largest volume dealership by new unit sales, in Mesa County, Colorado for six consecutive years. Finding a buyer who appreciated the strength of two award-winning dealerships with proven best practices was our goal in this engagement. It was a pleasure to work with Ron Bubar and navigate through today’s active, and competitive, auto dealership buy/sell market.”

A key part of Kerrigan Advisors’ approach to representing Grand Junction Subaru and Grand Junction Volkswagen was to provide insight into this attractive Colorado market, particularly in discussion with out-of-market buyers.  Grand Junction is one of the fastest growing cities in Colorado, one of the most affordable places to live in the state, and Subarus and Volkswagens have significant market share: Volkswagen’s market share in Colorado is 30% higher than the US average, and Subaru is the second highest-selling brand in the state.

“We never took the popularity of our cars for granted, and made customer service our top priority every day,” said Ron Bubar, Owner of Grand Junction Subaru and Grand Junction Volkswagen. “The success we’ve had over the years is a direct reflection of our tireless efforts to keep the customer experience front and center – no matter what challenges came our way. Kerrigan Advisors brought that same sense of commitment and dedication to the way they represented my dealerships. As a result, they were able to reflect to the marketplace an accurate picture of the dealerships’ value, both in terms of the quality of the assets and the importance of our people.” 

“In today’s record-breaking buy/sell market, it was important to identify a buyer who recognized the value of what Ron and his team created in Grand Junction and the tremendous benefits of operating in the Grand Junction market,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “Sonic Automotive really understood the unique position these dealerships held in their community and also has a powerful commitment to customer service that will ensure Grand Junction’s legacy continues.”

The Grand Junction dealerships have a strong track record of award-winning performances. In 2019, Grand Junction Subaru received the Subaru Love Promise Gold Award, and Grand Junction Volkswagen was named a Gold Pin Winner in 2019. Both awards recognize customer satisfaction and community involvement. The dealerships are also highly regarded online by JD Power, DealerRater and CarGurus. Notably, Grand Junction Volkswagen has won DealerRater’s Consumer Satisfaction Award for all dealerships in the state of Colorado for four consecutive years.

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

Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, which includes Kerrigan Advisors’ signature blue sky charts, multiples, and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases monthly The Kerrigan Index™ composed of the seven publicly traded auto retail companies with operations focused on the US market.  The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here. To read the 2020 Kerrigan Dealer Survey, click here (https://www.kerriganadvisors.com/the-kerrigan-dealer-survey/).

About Kerrigan Advisors

Kerrigan Advisors is a leading sell-side advisor and thought partner to auto dealers in the US.  The firm advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses.  Kerrigan Advisors has represented on some of auto retail’s largest transactions, including seven of the Top 150 Dealership Groups in the US, more than any other firm in the industry. Led by a team of veteran industry experts with backgrounds in investment banking, private equity, accounting, finance and real estate, the firm does not take listings, rather they develop a customized approach for each client to achieve their personal and financial goals. In addition to Kerrigan Advisors’ sell-side advisory and capital raising services, the firm also provides a suite of consulting services including growth strategy, market valuation assessments, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate due diligence.

Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report of dealership buy/sell activity and franchise values, received by nearly 10,000 industry participants in 35 countries.  To register to receive The Blue Sky Report®, click here: https://www.kerriganadvisors.com/the-blue-sky-report.  Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly index tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here: http://www.kerriganadvisors.com/the-kerrigan-index/. To read the 2020 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.

Kerrigan Advisors’ Founder and Managing Director, Erin Kerrigan, is a recognized expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, Automotive News’ Canadian World Congress, AICPA, and NADC. She has also been quoted numerous times by The Wall Street Journal, CNBC, Bloomberg and The Economist and has been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Bank of America, Ohio Automobile Dealer Association, and SunTrust Bank. Erin Kerrigan was named by Auto Remarketing as one of the leading women in Automotive in 2020.  Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News.

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

Transaction marks the 117th Kerrigan-led dealership sale since 2015

INCLINE VILLAGE, NV – June 22, 2021– Kerrigan Advisors, a leading sell-side advisory firm to auto dealers in the U.S., represented Lithia Motors (NYSE: LAD) in the sale of Audi Valencia to Ghreiwati Auto Group, owner of Surf City Nissan and Corona Nissan of Southern California.    

This transaction marks the 117th dealership that Kerrigan Advisors has advised on the sale of since its founding in 2015, making the firm the most active sell-side advisor to the highest value transactions in auto retail.   Kerrigan Advisors has its finger on the pulse of what has proven to be a record auto dealership buy/sell market in 2020/21, supported by extensive transaction expertise, a robust investor and buyer database, as well as the broad reach of The Blue Sky Report® by Kerrigan Advisors and the real-time market read-out of The Kerrigan Index™.

“We were proud to work with the quality team at Lithia Motors again, this time representing them in a sale of a valuable dealership,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “Our familiarity with the California auto retail market, the largest in the country, and our previous experience with the largest transactions in the state, meant we were well-positioned to identify the ideal buyer for Audi Valencia. Ghreiwati Group has a strong record of success in Southern California with Surf City Nissan and Corona Nissan, and their commitment to both employee and customer service excellence is well-aligned with Audi’s goals.” 

In addition to its Southern California dealership holdings, Issam Ghreiwati, Dealer Principal of the Ghreiwati Auto Group, built one of the largest retail and wholesale automobile distribution businesses in the Middle East over the last three decades, including Kia, Ford, Land Rover and Jaguar franchises. He was also named a Kia World Dealer in 2010.      

Lithia Motors is one of the largest and most active public dealer groups in the US, having acquired over $7.0 billion of annualized revenues since 2019.

“Our experience working with Kerrigan Advisors on a number of transactions over the past five years has been very positive, and we appreciated the exceptional support from their team as we completed this divestiture,” said Lithia Motors President and CEO Bryan DeBoer.  “Kerrigan Advisors’ extensive buy/sell experience, particularly in the complex Southern California market, helped ensure that this transaction was seamless for our team.”

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

Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, which includes Kerrigan Advisors’ signature blue sky charts, multiples, and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases monthly The Kerrigan Index™ composed of the seven publicly traded auto retail companies with operations focused on the US market.  The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here. To read the 2020 Kerrigan Dealer Survey, click here: https://www.kerriganadvisors.com/the-kerrigan-dealer-survey/.

About Kerrigan Advisors

Kerrigan Advisors is a leading sell-side advisor and thought partner to auto dealers in the US.  The firm advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses.  Kerrigan Advisors has represented on some of auto retail’s largest transactions, including seven of the Top 150 Dealership Groups in the US, more than any other firm in the industry. Led by a team of veteran industry experts with backgrounds in investment banking, private equity, accounting, finance and real estate, the firm does not take listings, rather they develop a customized approach for each client to achieve their personal and financial goals. In addition to Kerrigan Advisors’ sell-side advisory and capital raising services, the firm also provides a suite of consulting services including growth strategy, market valuation assessments, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate due diligence.

Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report of dealership buy/sell activity and franchise values, received by nearly 10,000 industry participants in 35 countries.  To register to receive The Blue Sky Report®, click here: https://www.kerriganadvisors.com/the-blue-sky-report.  Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly index tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here: http://www.kerriganadvisors.com/the-kerrigan-index/. To read the 2020 Kerrigan Dealer Survey, click here: https://www.kerriganadvisors.com/the-kerrigan-dealer-survey/.

Kerrigan Advisors’ Founder and Managing Director, Erin Kerrigan, is a recognized expert on dealership valuation, real estate, and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, Automotive News’ Canadian World Congress, AICPA, and NADC. She has also been quoted numerous times by The Wall Street Journal, CNBC, Bloomberg and The Economist and has been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Bank of America, Ohio Automobile Dealer Association, and SunTrust Bank. Erin Kerrigan was named by Auto Remarketing as one of the leading women in Automotive in 2020.  Kerrigan Advisors’ Managing Director Ryan Kerrigan is also a sought-after industry expert. He is featured in a monthly column for Dealer Magazine and has written Op-Eds for Automotive News.

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

Auto Dealership Buy/Sell Market Sets Another Record in Q1 2021, as Dealership Earnings, Revenue, Blue Sky Values, and Market Caps Hit Unprecedented Highs  

A perfect, and unique, combination of market factors - record auto sales and grosses, soaring valuations, waning pandemic crisis and potential new tax laws - fueled acquisition activity to 66 completed transactions in Q1, and an unprecedented 300 completed over the past 12 month period, according to the First Quarter 2021 Blue Sky Report® by Kerrigan Advisors

Incline Village, NV - June 21, 2021 – The auto dealership buy/sell market once again set records in 2021, a result of a unique confluence of market factors that resulted in 66 completed transactions, up 20% quarter over quarter, according to the First Quarter 2021 Blue Sky Report® by Kerrigan Advisors.  This capped 12 months of consolidation activity that resulted in an unprecedented 300 completed transactions.  In Q1, most dealerships, regardless of location, franchise and facility, continued to achieve historic profit levels, lifting the valuations of all franchises to new highs. Kerrigan Advisors’ estimate of the average dealership’s blue sky value is now $8.5M, a 10% increase as compared to 2020, and a rise of 33% from 2019.

“The once-in-a-lifetime environment that made 2020 a record year for the automotive buy/sell market was extended, and amplified, by auto retail’s tremendous profitability in Q1, fueling a historic level of acquisition activity,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors.  “As COVID cases diminished, US consumers emerged from the pandemic with a tremendous amount of capital from savings and government stimulus, as well as great demand for personal mobility.  This demand, coupled with limited supply, drove dealership profitability to new heights in the first quarter, topping what many thought was an unsurpassable fourth quarter.” 

Through March, dealership profits were up 82% as compared to the six-year pre-pandemic average, resulting in a historic 4.1% net-to-sales margin.  Low inventory resulting from the chip crisis did not appear to dampen consumer demand.  Consumers flush with cash and spurred by low interest rates, bought vehicles right off the transport truck. As a result, consumer spending on new vehicles in the first quarter of 2021 surpassed pre-pandemic levels for the first time since 2020.

“We see no sign of consumer demand, high dealership profits and accelerated buy/sell activity abating any time soon, especially as dealers continue to leverage, and pay-forward, the operational efficiencies and digital strategies they adopted during the pandemic,” continued Kerrigan. “While new vehicle inventory levels will be historically low during the critical summer selling season, rebounding fixed operations, as well as higher margin used vehicle sales, will help to offset these short-term challenges.” 

Not surprisingly, according to the Blue Sky Report, record earnings by the publics led to record market capitalizations, resulting in higher blue sky multiples as compared to the end of 2020.  The publics’ spend on acquisitions increased by 220% versus Q1 2020. Lithia continued to lead that charge, closing on the purchase of 10 dealerships during the quarter working closer to the company’s stated goal to add $50 billion in revenue over the next 5 years.

Capital market support contributed to a 53.3% rise in multi-dealership transactions, which represented over one third of all completed transactions in the first quarter of 2021.  Import non-luxury franchises also saw their share of the buy/sell market rise by seven percentage points to 37%, with Toyota leading all imports at 8.3% of the buy/sell market.

2021 Buy/Sell Trends

The First Quarter 2021 Blue Sky Report® by Kerrigan Advisors identified the following three important trends that are expected to meaningfully impact the buy/sell market for the remainder of 2021:

- A growing number of dealers will sell in 2021 hoping to lock in current tax rates

- Buyers finance growth with low interest rate debt, rather than expensive private equity

- An alternative dealership valuation model emerges based on revenue instead of earnings

“The disruption associated with digital retailing, accelerated by COVID-19, may be the catalyst for change to auto retail’s historic valuation paradigm,” said Ryan Kerrigan, managing director of Kerrigan Advisors.   Rather than focusing on a multiple of earnings, Lithia, for example, introduced the concept of a percentage of revenue, reporting that most of its transactions are valued between 15% and 25% of revenue.   

“This revenue valuation methodology, which is highly accretive based on Lithia’s current blue sky multiple and above market profit margins, is designed to feed Wall Street’s appetite for high revenue growth companies,” continued Kerrigan.

Blue Sky Multiples and Outlook – Kia, Hyundai, Toyota and Subaru Increase

According to the Kerrigan Advisors’ report, buyers have revised the way they apply blue sky multiples, with most applying them to an average of pre-pandemic and post-pandemic performance.  Buyers are hedging their bets, giving equal weight to the potential for 2021’s profitability to sustain in the near term, while considering the possibility of an eventual return to pre-pandemic earnings in the future.

The report made two adjustments to blue sky multiples in the non-luxury segment, increasing Hyundai’s and Kia’s high-end multiple and upgrading their multiple outlooks to positive. 

“Kia and Hyundai are producing exceptionally designed vehicles, meeting consumers demand for trucks over cars, and not only outperforming the market in unit sales in 2020 and 2021, but also effectively managing the chip crisis, with fewer inventory delays,” said Erin Kerrigan.

As Toyota exceeded Ford’s market share in 2020, with Q1 sales outpacing the industry by 73% and that share expected to grow, Kerrigan Advisors upgraded its multiple outlook to positive from steady. Subaru’s multiple outlook was also increased as it continues to make significant sales gains.

“Overall, we anticipate a thriving buy/sell market throughout 2021. We estimate that over 50% of the industry is in the midst of some form of generational transition, spurred by the economic roller-coaster of the last 12 months.  Increasingly, 2021 is viewed as a unique opportunity to exit at peak values and potentially lower capital gains tax rates, particularly given the challenge in assessing the impact of industry change on future valuations,” concluded Erin Kerrigan.

Highlights from the Q1 2021 Blue Sky Report® by Kerrigan Advisors include:

- 66 transactions were completed in the first quarter – a 20% increase over the first quarter of 2020

- 300 transactions were completed over the last 12 months (since the second quarter of 2020), more than any 12-month period in recent history

- Of the 66 completed dealership transactions, 23 were multi-dealership transactions, up 53.3% from 2020

- Average dealership blue sky values rose to another peak in the first quarter: to $8.5M, a 10% increase as compared to 2020, and a rise of 33% from 2019

- The Kerrigan Index hit new heights:  year-to-date through April, the Kerrigan Index is up 37.4%, outperforming the S&P 500 by over 230%

- Today, the publics’ average blue sky multiple is 8.1x, 76% higher than the average private dealership

- The publics spending on acquisitions increased 220% as compared to the first quarter of 2020

- Import non-luxury franchises took share from the luxury and domestic franchise buy/sell market, rising to a 37% share, driven in part by more top import franchises coming to market

- Auto dealership profits were up 82% in the first quarter compared to the six-year, pre-pandemic average, with a historic 4.1% net-to-sales margin

- Consumer spending on new vehicles was $118 billion in the first quarter, surpassing pre-pandemic spending in 2019 and 2020’s first and second quarters

- Consumers  ‘miles driven’ are  nearing normal levels, benefitting high margin fixed operations, which has fully recovered from pandemic lows

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: http://www.kerriganadvisors.com/the-kerrigan-index/.

About Kerrigan Advisors 

Kerrigan Advisors is a leading sell-side advisor and thought partner to auto dealers in the US.  The firm advises auto dealers nationwide, enhancing value through the lifecycle of growing, operating and monetizing their businesses, as well as offering restructuring and turnaround consulting services.  Kerrigan Advisors has represented on auto retail’s largest transactions, including seven of the Top 150 Dealership Groups in the US, more than any other firm in the industry. Led by a team of veteran industry experts, 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: https://www.kerriganadvisors.com/the-blue-sky-report.  Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly report tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here: http://www.kerriganadvisors.com/the-kerrigan-index/.

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

Auto Dealership Buy/Sell Market Sets Record for Transactions with Dealer Earnings and Blue Sky Values Hitting New Heights in 2020, Particularly in Business Friendly States with High Population Growth

The 2020 Annual Blue Sky Report® by Kerrigan Advisors reveals a red-hot market, with blue sky values up 20% and over 100 transactions in the fourth quarter alone; Toyota’s blue sky multiples increase

Incline Village, NV, - March 22, 2021–The auto dealership buy/sell market set new records in 2020, despite starting the year with pandemic closures and lockdowns, and swept past 2015’s previous high-water mark, redefining the value of the auto retail market, according to the 2020 Q4 and Full Year Blue Sky Report® by Kerrigan Advisors. Overcoming the standstill at the end of the first quarter, the buy/sell market came back with a vengeance in the second half: Over 176 transactions were completed after July 1, with a total of 289 completed for the year – a 24% increase over 2019 and 47 more transactions than in 2015[1]. In the fourth quarter alone, 103 transactions were completed – another record. 

“This record-breaking market was driven by a resurgence in dealership profitability,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. “This happened even with a dip in revenue, thanks to improvements in new and used vehicle gross profits and floorplan and SG&A expense reductions. Most impressive of all is that the source of improved profitability was not from high-margin fixed operations which actually declined.”  

“Importantly, the numbers of multi-dealership transactions continued to rise through the end of the year, setting another record (74 transactions), which is over a quarter of all buy/sells,” continued Kerrigan. “That reflects auto retail’s significant consolidation trend.” 

Increasingly, according to the report, owners of large dealership groups are choosing to sell their businesses at today’s high valuations rather than accommodate the changes and investments required in terms of electric vehicles and digital retail sales. This resilient – and resurgent – auto retail performance of 2020 has increased demand for dealerships and has continued to fuel valuations. For the year, average dealership blue sky values rose to $7.7 million, up 20.7% thanks to a combination of higher earnings and rising multiples.  Valuation multiples rose even higher in high growth, business friendly states such as Texas, Florida, Arizona, Colorado, Georgia, Nevada, North Carolina, South Carolina, Tennessee and Utah.

“The combination of today’s low yield investment environment, and access to low-cost financing, has driven dealership valuations upward,” said Ryan Kerrigan, managing director of Kerrigan Advisors. “Even as buyers adjust 2020 profits to offset the impact of one-time events, earnings for 2020 reached record levels – and that drove valuations to greater heights.”

Like private dealership valuations, publicly-traded dealerships also enjoyed a record year. The Kerrigan Index™, comprised of the seven publicly-traded dealership groups, reached a record level of 1,006 in March 2021, up 238.6% from the March 2020 low.  The publics are shifting their messaging to focus on their distinct digital retailing strategies, and to embrace the industry’s move to electrification. Armed with strong valuations, many are committing to growth through accretive acquisitions; their advantage in the buy/sell market is their access to lower cost capital.

In the report’s analysis of specific brand valuations, Toyota’s blue sky multiple was increased to a range of 6-7 times, reflecting the value of Toyota’s partnership model with its dealer network, especially as the industry shifts to electric vehicle fleets and online direct sales.

“As the future unfolds, OEMs who value their dealer network’s contribution to their success are likely to thrive,” said Erin Kerrigan. “We increased Toyota’s blue sky multiple because we see a true partnership with its retailers. That relationship will ensure Toyota’s franchise values remain high, even as the industry evolves toward a digital and electric future.”  This is important, according to the report as, in the fourth quarter of 2020, there was a dramatic shift toward electrification, with nearly every OEM presenting plans to develop an electrified vehicle fleet as a result of political pressure, as well as in reaction to Tesla’s success on Wall St. and at gaining 79% electric vehicle market share.

“Manufacturers that consider mimicking Tesla’s retailing strategy should keep in mind that 2020’s record earnings were driven in large part by auto retailers’ ability to adjust pricing,” said Ryan Kerrigan. “In a one-price, online arena, dealers’ ability to do so will be significantly curtailed, as will future fixed operations income.”

“How OEMs shift to electric and online sales will determine future franchise value,” continued Kerrigan. “Plans that are supportive of their dealer networks, and value the auto retailer contribution, will likely see their franchise values rise.”

The report also identified the following four market trends, which will meaningfully impact the buy/sell market in 2021 and beyond:

- Buyers’ tremendous access to capital leads to increased competition for dealership acquisitions

- Buyer demand in Texas and Florida drives multiples and valuations higher in those states

- Sellers increasingly expect valuations that recognize 2020’s improved profitability

- Facility investments factor into dealers’ transaction decisions

Highlights from the Q4 2020 and Full Year 2020 Blue Sky Report® by Kerrigan Advisors include:

• - Average blue sky values rose 20.7% by the end of 2020, driven by an increase in dealership earnings and rising buyer demand.
• - The Kerrigan Index has risen 238.6% since March 18, 2020 and outperformed the S&P 500 by 232.7%. It passed an important milestone on March 5th 2021, surpassing 1,000 for the first time in its history.
• - 2020 was a record year for buy/sells with 289 transactions completed, up 24% from 2019
• 103 transactions were completed in the fourth quarter.
• - Import luxury franchises increased their buy/sell market share in 2020, achieving an impressive 20% of buy/sells, up more than 50% from 2019’s level. 
• - Average dealership pre-tax profits rose 48.3% in 2020, despite a 4.2% decline in revenue.
• - Fixed operations represented just 44.6% of the average dealership’s gross profit in the fourth quarter of 2020, down 11.5% from 2019. Dealers increased gross profit margins on new and used vehicles by 32.0% and 8.2%, respectively.
• - More owners of large, multi-dealership groups are choosing to sell rather than compete with consolidators who rely on corporate, rather than personal, balance sheets to expand their business and invest in auto retail’s evolving future.

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 9,000 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: http://www.kerriganadvisors.com/the-kerrigan-index/.

About Kerrigan Advisors 

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

Kerrigan Advisors publishes The Blue Sky Report®, which is the auto industry's most comprehensive and authoritative quarterly report of dealership buy/sell activity and franchise values, received by over 9,000 industry participants in 35 countries.  To register to receive The Blue Sky Report®, click here: https://www.kerriganadvisors.com/the-blue-sky-report.  Kerrigan Advisors also publishes The Kerrigan Index™, the only monthly report tracking the seven publicly traded auto retail companies. To access The Kerrigan Index™, click here: http://www.kerriganadvisors.com/the-kerrigan-index/.

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

Angela Jacobsen, (angela@mwebbcom.com) mWEBB Communications, 714-454-8776

Two high-volume Florida dealerships sold to LMP Motors.    

Incline Village, NV, - March 8, 2021 – Kerrigan Advisors, a leading sell-side advisory firm and thought leader to auto dealers in the US, represented and advised Fuccillo Automotive Group, one of the largest private dealership groups in the nation, in its recent sale of Fuccillo Kia of Cape Coral and Fuccillo Kia of Port Charlotte in Southwest Florida to LMP Motors. 

Over the years, Fuccillo’s Florida dealerships have built a successful track record in the competitive and highly sought-after Florida car market. Kia of Cape Coral and Kia of Port Charlotte rank within the top 11 largest Kia dealerships in the US with respect to new unit sales.

“We are lucky to be part of these Florida communities, and to have sold cars to so many of the people who live and work in Cape Coral and Port Charlotte,” said Billy Fuccillo Jr., Vice President of Fuccillo Automotive Group. “And I’m just as fortunate to have worked with Kerrigan Advisors on this transaction. I needed advisors who are professionals when it comes to selling dealerships. That’s what I got with the team at Kerrigan Advisors.”

“There is a huge relationship between Floridians and the Fuccillo’s: the group’s iconic style and larger-than-life personality are part of community lore – one need only mention the popularity of Billy Fuccillo’s commercials to appreciate the positive impact the Fuccillo’s have had on the area at large,” said Gabe Robleto, Vice President of Kerrigan Advisors. “Working with the Fuccillo’s has been a privilege and we are proud to have represented them in several successful transactions.”

“Florida is a highly sought-after market by buyers due to the state’s robust population and job growth, lower taxes and high revenue per dealership - the 2nd highest in the US. The Fuccillo dealerships were valuable and unique assets that required a precise understanding of the particulars of this market and the buyer pool,” said Ryan Kerrigan, Managing Director of Kerrigan Advisors. “We are very pleased with the results of these transactions for our client and are confident that LMP Motors will continue the Fucillo’s premier legacy of excellent customer and community service throughout Florida.”

To contact Kerrigan Advisors, the most active sell-side advisor on larger transactions in the auto retail industry, click here.

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