Asbury Automotive Group today announced plans to acquire Jim Koons Automotive Companies, making it the largest acquisition to be seen in the dealership buy-sell market since 2021. The transaction will incorporate 20 storefronts and six service centers representing 29 different car brands into the Asbury network, which currently consists of 138 retail locations and 32 collision centers.
On this episode of CBT Now, host Jim Fitzpatrick sits down for an exclusive interview with Erin Kerrigan, founder and managing director of Kerrigan Advisors, the dealership buy-sell firm hired by Jim Koons to oversee the transaction. With an extensive list of successful deals involving some of the biggest names in retail automotive, Kerrigan is frequently called upon to assist successful business owners with the sale or purchase of a dealership. Today, she joins the show to discuss the agreement between Asbury Automotive and Jim Koons Automotive Companies and what it indicates for the rest of the M&A sector.
Key Takeaways
1. Pointing to the scale of the transaction, Kerrigan believes that the Jim Koons Automotive acquisition is evidence of ongoing strength in the dealership buy-sell market, even as the car industry grapples with economic headwinds and inventory shortages.
2. Asbury Automotive’s purchase is one of the largest regional acquisitions the dealership buy-sell market has seen, possibly shedding light on the future of industry consolidation.
3. Kerrigan Advisors has been tracking an increase in dealership buy-sell activity since the start of the year, which is currently approaching record levels as more retailers return to the M&A market.
4. In contradiction to industry-wide fears of declining sales and falling revenues, Kerrigan notes that many publicly traded retailers have seen their earnings for three consecutive quarters.
5. Many retailers are returning to the dealership buy-sell market to make good use of the cash they accrued during the COVID pandemic, which saw per-vehicle profit margins skyrocket across the automotive industry.
"We continue to see private dealers also really use this opportunity with the capital that they've amassed to also grow their enterprises regionally, so it's not just a public game at all." Erin Kerrigan
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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.
Contact us to learn more about Kerrigan Advisors’ sell-side services.
All of our conversations are 100% confidential.
