How to Effectively Sign and Close Automotive M&A Deals

September 29, 2022

The foundation of the Dave Cantin Group’s success is our deliberate and creative approach to the invariably complex, fraught, and occasionally tricky process of completing a dealership sale. The unique lessons from every closed sale are immediately applied to all that follow — to yours, if we are chosen to represent you.

To best serve our clients — that is, closing each transaction promptly and obtaining a fair deal — we devote ourselves to opportunities that have the greatest likelihood of completion. We carefully evaluate each deal’s potential to progress along our transaction roadmap:

  • Qualification
  • Valuation
  • Targeting
  • Acquaint the parties
  • Due diligence
  • Negotiate terms
  • Close
  • Aftersale

By necessity, this process is very thorough. Once you choose us to represent you, DCG will leverage the talent at our disposal to pursue this roadmap forward until your deal closes and beyond. When we lock our focus on closing, we can start the deal strong, smooth the wrinkles as they arise, and establish the best way to our clients’ final goals.

The DCG Roadmap

  • Qualification: Determining how we can help:

Many prospective buyers feel they are the “perfect fit” for a property and do not take into account the actual factors of their suitability. By the same token, many prospective sellers may have an unrealistic purchase price in mind.

From the beginning, and throughout the process, we coach prospective clients on realistic expectations and asset valuation. 

Once we feel that a prospect is open to considering our best advice, we will court them as a client, and commit to doing whatever it takes to bring their deal to a satisfactory close.

  • Valuation: Using a sharp pencil

Who is the cannier dealmaker — a lifelong car salesman or a hedge-fund negotiator? The answer is actually that both have their own skills that may make them equally savvy. 

We know the market and the players, and are confident of defining the most accurate valuation for your particular property. We guide our client’s formulation of fair demands, and set the other party’s expectations to reasonably meet them.

  • Targeting: Finding the right match

The current market trends emphasize consolidation. Public multinational corporations are chasing Main Street stores, while the grandkids of the original “mom and pop” who may have started a trusted local name are amassing hometown mini-empires. 

We emphasize the basic shared premise that everyone wants the deal to go through. Approach differences from that angle, and hidden alignments often will make themselves plain.

When buyer and seller agree to the simple notion that one wants in and the other wants out, making it work is merely a matter of commitment.

  • Acquaint the parties: Getting comfortable across the table

This scenario is very common: A seller insists their store’s greatest asset is its particular character that locals know and like, while a platform aggregator buyer wants to impose uniform processes and branding across multiple rooftops.

We try to assure both parties that success doesn’t depend specifically on an old-school or new-school ethic, nor on one party getting their way in general, but on the timeless combination of capable management and motivated employees.

Automobile sales and marketing has both radically changed and stayed exactly the same over the course of more than a century. It is one of the most lucrative and “sure-thing” commercial opportunities that exists for a reason.

  • Due diligence: Turning the cards up

A dealership might have several small shareholders, who acquired their equity under varying, sometimes loosely-structured or familial agreements. Publicly-held and equity buyers will insist on complete transparency, according to all applicable laws and customs.

We nonjudgmentally discover and acknowledge all discreet owners or silent partners. Then we assess how they might impact a transaction and act to bring them into compliance with the other party’s expectations.

  • Negotiate terms: Satisfying both sides

When entering negotiations, questions become concerns, and answers can raise new questions. The stakes can be raised at any moment, but engaging in negotiation implies a commitment by both sides to constructively meet any new obstacles.

Our approach is to maintain confidence in the shared objectives and the process to achieve them. We find it’s best to respond promptly and respectfully to all questions and concerns. It may be necessary to consider multiple times whether anything remains between the negotiated agreement and the closing.

  • Close: Bringing it all together

Milestones are important events, and should be treated as such. Anything remaining to be said, should be — but not as an extension of the negotiation phase. 

We plan the closing event anticipating emotions to potentially run high, and display empathy toward the parties’ joy and sadness. We prepare to overcome obstructions and are always ready to work late on this all-important step.

  • Aftersale: Leaving everyone better than you found them

A closed deal isn’t necessarily finished. Both buyers and sellers are at risk for feeling remorse over a transaction, and we believe it is our job to assuage any such concerns.

DCG understands that every buyer faces a challenge to integrate their new property. The seller and former employees can provide key assistance in this effort. We negotiate to reward their input while controlling the influence of any outside interests. DCG will work to maximize post-deal effectiveness, protecting the integrity of the agreement’s closure.

Why DCG is a top-performing automotive M&A firm

There’s a reason DCG Acquisitions has had a record year of closings so far in 2022. We focus on finishing out the transaction in the best possible way, and apply all of our capabilities to get you there: 

  • A roadmap that consistently leads to success 
  • An unparalleled list of industry-wide contacts
  • Demonstrated dedication to our clients
  • Creativity and focus to work through the problems and surprises that attend every deal, no matter how well-prepped the parties are

DCG can guide you in effectively navigating the red-hot franchised auto dealer market. Our extensive industry network of OEMs, financial lenders, dealership brokers, and related professionals helps us create a qualified, competitive environment on both sides of the sale, so that your transaction goes smoothly, without surprises.

Contact DCG Acquisitions to speak directly with one of our Automotive M&A specialists. We’ll help you understand how our expertise can help you get the most out of your dealership sale or purchase.