How the automotive retail buy/sell market finished up 2020 – Erin Kerrigan

January 27, 2021

Kerrigan Advisors, one of the nation’s top buy/sell firms in automotive retail, recently released their 2020 Kerrigan Index Year-End Review. On today’s show, founder and managing director of Kerrigan Advisors, Erin Kerrigan discusses how the index performed in 2020 and what it could mean moving forward in 2021.

As many know, it ended up being quite a remarkable year for auto retailers despite challenges from the COVID-19 pandemic. The Kerrigan Index, which is comprised of the seven publicly traded auto retailers, outperformed the S&P 500. The Index ended the year up over 30%, whereas the S&P 500 was only up 16%. However, Kerrigan reminds us that this doesn’t tell the whole story.

Throughout 2020, the Kerrigan Index reaches highs and lows, even going down so far as 50%. The second half of the year saw major rebounds for auto retailers, rising well over 100%.

Several huge M&A transactions happened during 2020 as well. As Kerrigan Advisors finish analyzing the data for 2020’s Blue Sky Report, they expect the average dealer earnings to be around $2 million for the year. The strong industry results in Q3 and Q4 promoted buyers to be more aggressive with their M&A activity. So much so, that Kerrigan expects a record-breaking year for M&A.

Upon receiving her MBA, Erin Kerrigan began her career as an investment bank for Piper Jaffray. She also ran her family’s dealership before selling it in 2006. Prior to founding Kerrigan Advisors, she held the position of Senior Vice President at AutoStar and was the head of Presidio Automotive.

About Kerrigan Advisors

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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