The newest publicly traded retailer to the market, LMP Automotive, recently closed on a handful of dealerships, including two high-volume Kia stores. Today on CBT News, Ryan Kerrigan, Managing Director of Kerrigan Advisors, joins the show to discuss LMP’s successful transactions.
Kerrigan begins the conversation by discussing Fuccillo Automotive Group selling two high-volume Kia stores in Cape Coral, FL and Port Charlotte, FL to LMP Automotive. When LMP recently decided to go public, they became the first new publicly traded automotive retailer to enter the market in the last 20 years.
Kerrigan calls the capital markets, “buoyant,” when explaining why LMP decided now was a perfect time to enter the market.
“There is so much capital-seeking return finding its way to all kinds of investments, including these newly traded public companies,” said Kerrigan. “It’s not just automotive retail that they’re looking around actively. It’s really across the U.S. economy, and it’s no surprise, given the size of our business, that one or more SPACs (special-purpose acquisition companies) are looking to get into this business.”
Kerrigan then discusses what prompts dealership owners to sell in the current market. In general, reasons for a sale are fairly predictable. They involve an aging owner, generational change, executives that want to change. However, Kerrigan says the current market creates a unique opportunity for owners to sell their dealership. Kerrigan refers to these sellers as “opportunistic sellers,” meaning owners see how high valuations are and make the decision to take advantage of the strong market.
Kerrigan concludes the conversation by cautiously looking ahead to the future of the market. He says that he usually withholds predictions because the market can change rapidly. He does suggest that the current data suggest the market looks very healthy moving forward.
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 275 dealerships representing nearly $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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