The six publicly traded auto retailers were big dealership buyers in 2021. That activity didn't repeat in 2022.
After a year in which—each of the six publicly traded auto retailers bought—dealerships - including some that hadn't—done so in years—- all but one acquired again in 2022.
But the overall purchase total was a fraction of the number of U.S. stores the publics acquired in 2021, a year dominated by—four of the largest dealership acquisitions in industry history, each of which was completed by a publicly traded auto retailer.
Automotive News—tracked 19 acquisition transactions completed by the public auto retailers in 2022, which involved just 39 dealerships trading hands. Those figures represent a drop of more than 50 percent for the number of transactions and an 82 percent plunge in the number of acquired dealerships.***Kerrigan Advisors, a sell-side dealership advisory firm in Incline Village, Nev., that also tracks deals, estimated that the publics spent $1.9 billion on acquisitions in 2022.Kerrigan Advisors in its 2022 annual Blue Sky Report estimated the publics' fourth-quarter acquisition spending plunged 94 percent from the estimated $6.3 billion spent in the fourth quarter of 2021."The decline in the publics' acquisition spending in 2022 was largely a byproduct of their falling market valuations throughout most of the year, as Wall Street discounted these companies' ability to sustain record profitability," Kerrigan Advisors said in its report.
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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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