Auto Dealership M&A Stuck in Neutral
After strong 2019, activity moves to slow lane.
4/13/20, Forbes [By Jeff Sheban & Deb Balshem]
With the gears of the economy grinding to a halt over COVID-19-related quarantines, it should come as no surprise that auto dealership M&A – coming off a strong year in which 233 transactions were completed nationwide – has stalled.
Just last month one of the nation’s largest dealership groups – Georgia-based Asbury Automotive Group – said it was terminating its $1 billion acquisition of 17 new car franchises from Texas-based Park Place Dealerships “to preserve financial flexibility in light of current uncertainty in the global markets resulting from the COVID-19 outbreak.”
And AutoNation, the nation’s largest auto dealership chain, said last week it was furloughing 7,000 employees, slashing executive pay and postponing more than $50 million of capital spending as sales dropped by half in March.
Amid the uncertainty, investment banks and advisors who specialize in the sector are telling clients to hold off on selling their dealerships until the crisis has passed or the stimulus package has taken effect, “hopefully sometime this summer,” says Erin Kerrigan, founder and managing director of Kerrigan Advisors, an Irvine, California-based auto industry sell-side advisory firm.
Dave Cantin, CEO and founder of automotive dealership M&A firm Dave Cantin Group, says he had roughly a dozen deals nationwide preparing to close in the first half of this year, with an average value of over $25 million. None are canceled, but all are postponed, he adds… continue reading here
About Dave Cantin Group:
Dave Cantin Group (DCG) is a full-service M&A firm that manages the sale and purchase of automotive dealerships throughout the United States. With over $11.5 billion in collective dealer acquisitions and $3 billion in dealership listings, DCG is one of the world’s largest automotive dealership M&A firms. Dave Cantin personally has helped raise more than $150 million in the fight against pediatric cancer, and DCG is committed to donating a percentage of its revenue to the cause. DCG is headquartered in New York with regional offices in California, Florida, Illinois, New York, and Texas.