Absent the peak-defining mega-deals of 2021, fewer stores changed hands in 2022 despite an increase in buy-sell transactions.
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Automotive News—so far this year tracked at least 90 first-quarter transactions involving 127 dealerships, a 9.8—percent increase over the 82 transactions tracked in the first quarter last year when 114 dealerships changed hands. And for the second quarter,—Automotive News—has tracked at least—93—transactions involving 143—dealerships, though recording deals for those three months continues.
Dealers and brokers who spoke with—Automotive News—predict a strong finish for buy-sell activity this year.Kerrigan Advisors, a sell-side firm in Incline Village, Nev., in its first-quarter Blue Sky Report, tracked a record 103 transactions in the quarter, a 43 percent jump from 72 transactions the firm counted for 2022's first quarter.
Kerrigan: Plenty of cash to fuel growth strategies
Managing Director Erin Kerrigan said high dealership earnings in recent years have continued to fuel store acquisition demand.
"Dealers are sitting on three years of cash flow that they never could have imagined," Kerrigan told—Automotive News.And, Kerrigan said, while some of that capital "has been put to work in transaction activity in the last few years, there's still a lot to be spent."
She expects second- quarter transactions—will outpace the first quarter and buy-sell activity—will—remain elevated.
"I project 2023 is a very active year that will rival 2022," Kerrigan said.
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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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