The Blue Sky Report^®

The latest edition of The Blue Sky Report^® finds dealership buy/sell activity remaining at historically elevated levels in the first half of 2026, even as industry profitability declined from 2025. Strong buyer access to capital, rising consolidation and increasing demand for scale continue to support transaction activity and dealership valuations, particularly for high-volume franchises in attractive markets.

Key highlights of the report include:

• Dealership buy/sell activity remained more than double pre-pandemic levels, with 224 transactions and 351 franchises sold in the first half of 2026. On a trailing twelve-month basis, a record 462 transactions were completed, representing 724 franchises.
• Public dealer groups' acquisition spending per dealership and average acquired-dealership revenue both hit new records, driven in large part by Kerrigan Advisors' client Hennessy Automobile Companies' announced $1 billion sale to Group 1 Automotive, which set a new benchmark for blue sky pricing at $100 million per dealership for a 10-dealership group.
• Despite record valuations, average dealership earnings declined an estimated 10–20% year-over-year, pressured by rising operating costs and a difficult comparison to 2025's tariff- and EV-policy-driven demand.
• Industry consolidation continued to accelerate, with the Top 100 private dealership groups' share of industry revenue growing more than three times faster than in the five years before the pandemic.
• Kerrigan Advisors made three blue sky multiple adjustments this quarter, increasing Kia’s low-end multiple to 5.0x and reducing Volkswagen and Audi to reflect changing franchise performance and buyer demand.

Specific trends also discussed in the latest Blue Sky Report^®:

• With Increased Consolidation and Higher Transaction Values, the Buy/Sell Market Becomes More Complex
• Blue Sky Multiples Diverge Significantly by State
• Revenue per Rooftop and Local Market Share Drive Dealership Group Valuations