Strategic Consulting Services

Growing a Dealership Group

We advise dealers on how to make informed decisions with respect to capital allocation, acquisitions and growth to ensure you are maximizing enterprise value as you expand.

• Customized Strategic Growth Plan
• Portfolio Review
• Transaction Evaluation Systems and Acquisition Opportunity Parameters
• Return on Investment Analysis
• Buyside Due Diligence
• Open Point Proposals

Client Engagement Examples:

• Prepared a detailed expansion plan for a successful, growing dealership group, which included an assessment of the current organization and a tailored roadmap for growth to enhance the value of their group.
• Built an interactive “website-style” presentation for a group in the pursuit of an open point presenting live to a manufacturer.

Investing In The Industry

We advise professional investors, family offices and experienced operators as they seek ways to enter the auto retail industry.

• Opportunity Assessment & Prioritization
• Operational Review
• Review and Advise on Letters of Intent/Asset Purchase Agreements
• Return on Investment Analysis
• Buyside Due Diligence
• Financial Forecasts
• Real Estate Assessment

Client Engagement Examples:

• Advised a family office seeking to decode the auto retail industry, prioritize their search parameters and evaluate proven industry operators.
• Led buyside due diligence for a major West Coast family office evaluating the acquisition of multiple luxury stores. Our analysis resulted in a material price reduction given errors in the due diligence materials provided.
• Completed financial review and provided industry expertise for a large private equity firm evaluating an investment in a high-growth auto retailer which had uniquely adopted technology and targeted marketing.
• Supported strategy development, transaction evaluation and buyside due diligence for experienced industry executive seeking to create a new auto retail group.

Improving Profits And Operations

Leveraging decades of operational experience, we assist dealership groups addressing operational performance issues and turn-around scenarios. Our team will work with auto retailers to assess operations, outline objectives and closely track performance metrics to improve underperforming stores, sometimes in preparation for a future sale. We also help in assessing new management candidates and developing current managers.

Client Engagement Examples:

• Interviewed and replaced the General Manager in an underperforming store and developed departmental action plans highlighting areas of opportunity and improvement. With weekly conference calls and monthly site visits to develop the General Manager, the dealership improved from break-even to a monthly profit of $50,000 and projected full year earnings of $800,000.
• Assisted a dealer with the refinancing of floorplan and real estate loans, resulting in a material reduction in both financing lines.
• Reviewed and implemented performance-based compensation plans for a client’s management personnel and brought all other pay plans into compliance.

Preparing for a Future Sale

We advise dealers proactively thinking about a future sale and seeking to maximize their transaction price. Bringing our firm’s vast experience of buyers’ valuation drivers in today’s buy/sell market, Kerrigan Advisors team reviews our clients’ accounting and management systems to improve their marketability for a future sale. Making small adjustments in advance of going to market can vastly improve the overall quality of the financials used to value a dealership or dealership group in a buy/sell transaction.

• Prepare Adjusted Earnings Analysis
• Advise on Accounting Policies and Procedures Best Practices
• Monitor Dealership and Leadership Performance
• Conduct Portfolio Review
• Identify Potential Deal Issues and Create Action Plans
• Assess Management Company Functions

Client Engagement Examples:

• Assisted in the annual accounting process to ensure dealership financial statements captured proper income and expense items, which in turn reduced the amount of time for the external CPA’s review process and simplified the addback schedule presented to potential buyers.
• Reviewed customer loyalty programs and assessed related liability for proper disclosure to potential buyers.

Changing Ownership

Whether looking to bring on a new partner, buy-out an existing partner, or sell to the next generation, these transactions typically require some sort of valuation. Kerrigan Advisors’ deep experience in the dealership buy/sell market, supported by the firm’s finance and accounting professionals, enables us to provide certified valuations and market value assessments to help dealers facilitate an ownership transfer. Our services specifically include:

• Certified business valuation (through a collaboration with select accredited firms)
• Market value assessments of dealerships including blue sky
• Return on investment analysis of ownership purchase

Client Engagement Examples:

• Advised large private group on the market value of its Northeast platform. This market assessment identified historical adjusted earnings and also analyzed the key factors specifically impacting the dealerships’ blue sky multiples to arrive at a market value.
• Collaborated with a CPA firm to complete a certified business valuation of a large dealership being passed down to the next generation.
• Assessed the market value of a six-store underperforming luxury dealership group by combining a discounted pro forma cash flow analysis with a comprehensive review of the key factors impacting blue sky multiples.

Assessing Dealership Real Estate

Levering our deep real estate expertise, Kerrigan Advisors can review and identify issues that should be raised and vetted when acquiring or selling dealership real estate.

• Assist in Negotiating Real Estate Purchase and Lease Agreements
• Assess Real Estate Financing Options and Negotiate Best Terms
• Evaluate Real Estate Transaction Documents:
  • Appraisals
  • Surveys
  • Environmental Studies
  • Zoning Reports
  • Title Documents

Client Engagement Examples:

• Successfully negotiated a new dealership lease at a reduced rent in connection with a buy/sell transaction in Texas.
• Provided expert guidance in the negotiation of a real estate purchase agreement and property lease.

Expert Witness/Litigation Support

Our team has been called upon regularly to assist dealers going through litigation, providing financial analysis, forensic accounting, valuation, and expert testimony.

Client Engagement Examples:

• Assisted in valuation and defense of valuation analysis for luxury dealership group in New Jersey.
• Prepared valuation assessment for California auto group to assist in mediation.
• Assisted in valuation and defense of valuation analysis for two luxury franchises located in Colorado.
• Assisted in valuation and submitted declarations in partner dispute on valuation of luxury auto group in Idaho.
• Assisted in valuation and defense of valuation analysis and negotiation of partner dispute for a luxury dealership in Nevada.
• Prepared analysis and provided expert testimony regarding dealership operations and profitability of large Southern California dealership group.
• Prepared analysis for private mediation concerning two luxury franchises in California.
• Retained to provide expert testimony on the customs and practices of auto retail transactions and the interpretation of a buy/sell agreement as it related to factory payments to dealerships in California.