Lack of public dealership megadeals in 2022 left room for private buyer transactions to dominate

Written by:
Automotive News
August 6, 2023

The 2021 buy-sell year was notable for four supersize acquisitions that helped frame the latest wave of dealership consolidation. Deals of that size did not happen in 2022.The dealership buy-sell market in 2022, following what is considered the biggest year for acquisitions in auto retail industry history, bustled with a different kind of busy.The 2021 buy-sell year was notable for four supersize acquisitions by the publicly traded auto retailers that helped frame the latest wave of dealership consolidation.

Deals of that magnitude did not happen in 2022. Instead, it was private dealers and groups who collectively were the most active buyers, often completing deals for just one or two dealerships at a time. And amid steady deal activity, the number of transactions in 2022 actually outpaced 2021's total.

***Kerrigan Advisors, a sell-side dealership advisory firm in Incline Village, Nev., said in its 2022 annual Blue Sky Report that 51 percent of the publicly traded auto retailers' capital was allocated to stock buybacks, more than double what it was in 2021. Kerrigan Advisors said the publics' falling market valuations throughout most of 2022 led to fewer dealership acquisitions.

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About Kerrigan Advisors

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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