Carson Kia was part of the country’s largest Kia Motors North America dealership group by volume until last month, when Renton, Wash.-based Car Pros Automotive Group sold the franchise and its 72,000-square-foot facility to Trophy Automotive Dealer Group in Glendale.
Neither terms of the deal nor financials for the buyer or seller were disclosed.
Trophy Automotive Chairman and Chief Executive Nasser Watar said the acquisition in Carson is the start of a campaign to grow to 30 dealerships within 30 months.
“We are proud of this new acquisition which is a testament to our consistent approach of growing our footprint in the automotive space,” Watar said in a statement.
Watar’s ambition falls in line with an industrywide consolidation trend.
“A big driver is the larger groups are finding cost efficiencies and successfully driving down costs relative to the smaller dealership groups,” said Ryan Kerrigan, managing director of Kerrigan Advisors, an Irvine-based brokerage that represented Car Pros on the August sale.
The deal for Carson Kia was relatively small. The franchise wasn’t on the Business Journal’s most recent list of largest auto dealers in Los Angeles County, which featured 50 enterprises with more than 1,250 new vehicles sold in 2017.
The acquisition, however, adds to Trophy Automotive Dealer Group’s spread of brands and presence in various parts of Los Angeles County. The group’s holdings now stretch from the San Fernando Valley to the San Gabriel Valley and from downtown to the South Bay, with a local lineup that also includes: Mercedes Benz of Encinco; Mercedes Benz of Valencia; Universal City Nissan; West Covina Nissan and Kia Downtown Los Angeles. None of those dealerships were on this year’s Business Journal list.
Carson Kia moved into the 6.5-acre site just off the 405 freeway in 2016, after completing a nearly $20 million renovation that included a 65-foot sign with a 40-foot-wide digital screen.
Car Pros paid the city $6.4 million for the property, which previously hosted an RV dealership, according to reports.
Pressure to consolidate stems from shrinking margins on a per-vehicle basis in part due to shoppers using digital resources to research purchases, according to Michael Issa, principal at GlassRatner, a restructuring specialist and subsidiary of Westwood-based B. Riley Financial Inc. subsidiary.
“Car gross profit has been trending down on most, if not all, brands for a variety of reasons—one of which is the availability of information online,” said Issa, who advised on the recent sale of an Acura dealership in Orange County.
Subrina Hudson is a reporter for the Orange County Business Journal, a sister publication of the Los Angeles Business Journal.
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.