Morgan Automotive Group, to quote The Eagles, lived “life in the fast lane” in 2020-21 in terms of revenue growth. According to company spokesman Tanner Boyle, the firm’s revenue jumped from $3.22 billion in 2020 to $5.41 billion last year, up 68%. It ended 2021 with 4,593 employees.
Part of the Tampa company’s growth can be attributed to its aggressive M&A strategy. After its latest acquisitions, in mid-May, Morgan Automotive now boasts 55 dealerships, including 23 in the Tampa Bay region.
As of Jan. 4, 2019, the company owned and operated 32 dealerships, meaning its footprint has increased by nearly 72% over the past three years — a remarkable run, especially considering the economic disruption that accompanied the COVID-19 pandemic. Coupled with an 18% increase in car sales from 2020 to 2021, that makes Morgan the eighth-largest dealership group in the United States, according to trade magazine Automotive News.
Good times are rolling not just for Morgan, but hundreds of car dealerships nationwide. According to Kerrigan Advisors, a company that specializes in dealership valuation and buy/sell trends, 320 dealerships changed hands from June 2020 to June 2021, and dealership profits, in the first half of 2021, rose to $1.96 million — 164% more than the industry average between 2015 and 2019.
“Today’s activity level is a byproduct of the industry’s explosive profitability,” states Erin Kerrigan, founder and managing director of Kerrigan Advisors, in a news release.
Because of a semiconductor chip shortage that affected the supply of new vehicles, used cars soared in value during the pandemic, with prices rising by nearly 30% from January 2020 to June 2021, Kerrigan Advisors found. That led to a 79% increase in gross profit per used vehicle sale.
“Most dealers are buyers, not sellers, and few are willing to accept the status quo,” states Ryan Kerrigan, managing director of Kerrigan Advisors, in the release. “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.”
Kerrigan Advisors is the leading exclusive 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 auto 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. Kerrigan Advisors 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, consulting, accounting, finance and real estate, we not take listings nor do we employ a brokerage model; rather we 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 automobile dealership 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®, the industry authority on dealership buy/sell market trends and valuations and 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 The Kerrigan Index™ comprised 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 2024 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.
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