Dealership buy-sell brokers at the NADA Show predicted a busy year of transactions and some expect a record-setting first quarter for their firms.
LAS VEGAS — The brisk pace of dealership buy-sell transactions, with several large transactions, will lead to record-setting first quarters, two buy-sell brokers told Automotive News. And others said they see no signs of deal pace slowing.
Erin Kerrigan, managing director of Kerrigan Advisors, a dealership sell-side firm in Incline Village, Nev., said she predicts a robust year.
"We're going to have a record Q1 as a firm," Kerrigan said. "The reason we had a record '23, and we're going to have a record first-quarter '24 is because there's tremendous demand from buyers who are very well-funded, and now there are more sellers coming to market to capture the valuations because they're concerned that the valuations can go down in the next 12 months."
Kerrigan's firm was involved in the sale of 50 dealerships last year. Kerrigan Advisors is representing Leith Automotive in its sale of more than 25 stores across North Carolina, to Holman, a Mount Laurel, N.J., group that ranks No. 26 on Automotive News' list of the top 150 dealerships groups based in the U.S.
''I think '24 is going to be a very busy year," Kerrigan said. " '25, my crystal ball gets pretty murky. It's really a question of the economy, interest rates and the strength of the consumer to drive up vehicle sales in my view, and if that happens, which it could, I think we'll have a very robust year in '25. But if we see a pullback or a recession, I think we'll likewise see a pullback in buy-sell activity and valuation in '25."
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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.
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