The 2020 auto dealership buy/sell market declined in the first quarter, falling 9.3 percent off 2019’s transactions pace as the COVID-19 pandemic took its toll on auto retail, according to the just-released First Quarter 2020 Blue Sky Report by Kerrigan Advisors. Transactions slated to close at the end of the quarter were postponed, renegotiated or, in the worst case, terminated. However, the report indicates that blue sky values are not dramatically impacted and, with auto sales due for an uptick, a buy/sell rebound in the second half of 2020 is anticipated.
However, Kerrigan Advisors expects the second quarter of 2020 to be the slowest buy/sell market in recent history due to pandemic stay-at-home orders.
Among the franchises being acquired, domestics continued to dominate in the first quarter of 2020, representing 57 percent of buy/sells, up 84 percent since 2015. Domestic dealership buy/sell market share is now consistent with franchise market share. Kerrigan Advisors expects domestics to dominate the 2020 buy/sell market, as multi-generation dealer families decide to sell post-pandemic. Additionally, import luxury’s buy/sell market share increased in the first quarter to 18 percent, up 12.5 percent over last year.
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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