Founded in 1973, Jim Koons Automotive Companies was one of only 13 private dealership groups to reach more than $3 billion in revenue in 2023. Composed of top-volume franchises, including five Toyota, four Ford, four General Motors and two Kia franchises, as well as Lexus, Mercedes-Benz, Hyundai, Volvo and Stellantis franchises, the Koons group is the dominant retailer in the thriving Washington-Baltimore market – the fourth-largest region by population in the United States.
In 2023, owner Jim Koons decided to sell his group to Asbury Automotive Group. Kerrigan Advisors had the honor of representing Koons in the transaction. We recently sat down with Mr. Koons to get his perspective on the auto industry and his 50-year legacy as one of the top auto retailers in the nation.
Jim Koons: It was the hardest decision I’ve ever made. I love the car business. I always knew I wanted to be in the car business. I grew up in the business. My parents were great mentors and they loved their employees and loved their work.
I worked at the dealership all through high school and college. Koons Ford was only two blocks from our house. I graduated from Northwood University, immediately started work full time and never looked back. I don’t remember a day when I wasn’t excited to get to work and make something happen.
As difficult as it was, selling was the most prudent decision for the future of Koons. At 72 years old, I realized that the runway wasn’t getting any longer. I realized the importance of having an orderly transition and finding a company that would provide the best culture, innovation and resources to foster the long-term growth our employees deserve.
Koons: Asbury has a sterling reputation and David Hult (Asbury’s president and chief executive officer) is an awesome leader with tremendous personal character and integrity. The company’s employee- and customer-centric vision matched our culture. We were so impressed with their team members from the start. I believe our employees and customers are in good hands. I am confident that Asbury will be excellent caretakers of our brand. I am delighted with how everything worked out.
Koons: Without question, it was providing opportunities and livelihoods for our many dedicated and hardworking employees and their families. It is so rewarding to see their success and how many of their dreams have come true. I am also very proud that Koons has always been one of the most elite groups in the nation.
"I realized the importance of having an orderly transition and finding a company that would provide the best culture, innovation and resources to foster the long-term growth our employees deserve." — Jim Koons
Koons: It starts with the leader. You must have the passion and desire to keep improving and taking risks – and surround yourself with people who have the same passion, work ethic and morals. You need to give them the support and tools to be successful and don’t micro-manage them. Furthermore, you must show them you care; always strive to do the extra things to reward and recognize your productive and high-performing employees. However, you still need to hold all the employees accountable. Do not be afraid to speak the truth when performance needs to improve. You must have high standards if you want to attract high-quality people.
Koons: Lead by example. I have loved the business and hopefully my passion and work ethic set the pace. I’ve been getting up at 5 a.m. for 50 years. I would spend at least two hours studying and coming up with a game plan before I got to the office. Preparation is critical. You also owe it to your team to let them know where they stand. You need to know their objectives and numbers. I have always preached that the most important thing you can do every day is get the first deal on the board. The second most important thing is to get the second deal on the board – and so on. Everything in the dealership – all departments – starts with selling a car. You must also establish a culture of positive peer pressure in which employees don’t want to let each other down.
Koons: I am the luckiest man in the world. As I reflect on the last 50 years, I am overwhelmed by the sacrifice and dedication of our employees. I cried for a few months thinking about the many individuals who have worked for Koons their entire career. We had almost 500 folks with 10 to 50 years of service. I couldn’t imagine not recognizing them in a special way. It was my way to say thank you for everything. Better yet, I am confident that Asbury has the same philosophy that the people are everything.
Koons: Our industry, like most industries, has always been subject to lots of change. I think we can hold on to some of the mindsets and lessons learned from the pandemic. The market and gross profits will normalize, but the car business always presents opportunities regardless of the market. The good operators will continue to succeed.
Koons: It will be increasingly difficult to keep up with the demands of technology and regulations and it will require more infrastructure. Koons would have been big enough to continue to meet those challenges, but it will be challenging for many.
Koons: I love the car business. If I were a younger man, I would still be as excited as ever to enter it. I have seen all types of markets in the last 50 years. The business will remain strong and good dealers will prosper, despite the naysayers. If you are willing to give it everything and make the tough decisions, it is still the greatest business I know. An individual can make such a difference.
Koons: Of course, their vast experience and expertise were critical. I also had the confidence that they were personally interested in my goals and aspirations. They listened and were always respectful of the business we built. Their relationships with potential buyers and their reputation of representing elite groups were also important. Like Asbury, the Kerrigan team felt like the Koons team from day one. Erin Kerrigan (Kerrigan Advisors’ founder and managing director) personally is a force to be reckoned with and did a great job advising us.
Kerrigan Advisors is the premier sell-side advisor and thought partner to auto dealers nationwide. 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. Kerrigan Advisors has represented some of auto retail's largest transactions and advised more of the largest dealership groups in the US than any other buy/sell firm in the industry. Led by a team of veteran industry experts with backgrounds in investment banking, private equity, accounting, finance and real estate, the firm does not take listings, rather they develop a customized approach for each client to achieve their personal and financial goals. In addition to Kerrigan Advisors' sell-side advisory and capital raising services, the firm also provides a suite of consulting 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 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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