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Dealership buy-sell pace is hottest in years

Dealership acquisitions continue to soar, positioning 2014 to be one of the most active years for buy-sells in more than a decade, say advisers who track transactions.

Through July, private acquisition announcements in Automotive News more than doubled to 70 transactions from 32 in the year-earlier period, the midyear Haig Partners Blue Sky Report released last week said. Private deals counted by The Banks Report, an online news service that tracks buy-sells, jumped to 133 from 74, the Haig Partners report said.

"Dealership values are at the highest level ever, and the pace of acquisitions is accelerating," Alan Haig, president of Haig Partners, a dealership buy-sell advisory firm in Fort Lauderdale, Fla., said in the report.

During the first six months of the year, the total number of buy-sell deals jumped 75 percent to 95 transactions from 54, according to the Kerrigan Quarterly Blue Sky Report, which cited its own research and The Banks Report.

"At this pace, 2014 will likely result in at least 200 buy-sells," Erin Kerrigan, managing director of Kerrigan Advisors in Irvine, Calif., said in her report.

U.S. acquisitions by the public retailers continue to increase. Several such acquisitions are expected to close in the third quarter, including Lithia Motors Inc.'s purchase of the 27-store DCH Auto Group Ltd., which was announced in June.

Looking at just the public retailers, the most active year in the last decade was 2004, when they collectively spent $1.05 billion on acquisitions in the United States, according to Haig Partners.

The Haig and Kerrigan reports give different totals for acquisition spending by publicly traded dealership groups through the first half.

Haig said public groups, in their quarterly SEC filings, reported spending $306 million on U.S. acquisitions in the first half, up from $186 million in the year-earlier period.

Citing those filings, Haig also said public groups spent just $18 million on overseas acquisitions in the first half vs. $187 million a year earlier.

The Kerrigan report said the publics spent $266 million on U.S. acquisitions in the first half, up from $155 million for the year-earlier period. Kerrigan also uses the numbers filed in the retailers' quarterly reports but adjusts them to remove inventory costs.

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