In today’s episode of Driving Solutions, we’re thrilled to have Erin Kerrigan, founder and managing director of Kerrigan Advisors, join us for an exclusive update on the booming buy-sell market. With an impressive track record and valuable insights into market trends, Kerrigan sheds light on what’s driving this record-breaking activity and how dealers can navigate these dynamic changes.
1. Kerrigan Advisors has had a stellar year, facilitating over $1.5 billion in transactions across more than 60 franchises. This surge highlights a very active buy-sell market, especially in high-growth regions such as Texas, Florida, and the Carolinas.
2. There is a noticeable trend of buyers becoming more selective, favoring high-growth markets and strong franchises. In contrast, dealerships in low-growth areas or with weaker franchises face greater difficulty in closing deals.
3. Current dealership valuations are based on recent earnings, reflecting a state of normalization that is still higher than pre-pandemic levels. Kerrigan notes that the market is adjusting to a new normal, with future earnings projections driving valuations.
4. Private dealers are increasingly seeking outside capital from family offices, equity partners, and even the bond market. This shift is moving the industry from a family-owned model to one supported by professionally managed capital.
5. OEM executives express skepticism about meeting EV sales goals and highlight high vehicle prices as a major hurdle. Additionally, there’s growing concern that OEMs may seek greater control over customer data and relationships in the future.
"Regarding your valuation, are your valuations based on what you have done for me lately? What is the business doing now? Because everything feels that we are in a state of normalization." — Erin Kerrigan
Kerrigan Advisors is the leading sell-side advisor and thought partner to auto dealers nationwide. Since its founding in 2014, the firm has led the industry with the sale of over 280 dealerships representing $9 billion in client proceeds, including the third largest transaction in auto retail history – the sale of Jim Koons Automotive Companies to Asbury Automotive Group. The firm advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses. Led by a team of veteran industry experts with backgrounds in investment banking, private equity, accounting, finance and real estate, Kerrigan Advisors does not take listings, rather they develop a customized sales approach for each client to achieve their personal and financial goals. In addition to the firm’s sell-side advisory services, Kerrigan Advisors also provides a suite of consulting and investor services including growth strategy, market valuation assessments, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate due diligence.
Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, which includes Kerrigan Advisors’ signature blue sky charts, multiples, and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases monthly The Kerrigan Index™ composed of the seven publicly traded auto retail companies with operations focused on the US market. The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here. To read the 2023 Kerrigan Dealer Survey, click here. To read the 2024 Kerrigan OEM Survey, click here. Kerrigan Advisors also is the co-author of NADA’s Guide to Buying and Selling a Dealership.
Contact us to learn more about Kerrigan Advisors’ sell-side services.
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