Pendragon, a large public auto retailer in the United Kingdom, has named former AutoNation Inc. COO Bill Berman to lead the company as it searches for a chairman and CEO.
Berman, who joined the company's board in April, began as interim executive chairman on Oct. 1, as Chairman Chris Chambers stepped down. The company, struggling financially and working to sell its U.S. stores by year end, also is without a CEO after Mark Herbert left earlier this year.
Berman, 53, said one of the company's shareholders initially approached him as Pendragon was looking for someone with "transformational automotive experience" to help with future retail projects.Berman said the call to lead the company, however, came as a surprise.
"I love a challenge and this is a challenge," he told Automotive News in a telephone interview.
Berman spent 21 years at AutoNation, including almost three years as COO. He left in June 2017 and shortly ran AutoCanada's U.S. operations before joining Pendragon's board.
Pendragon in a statement last month said Berman will "provide leadership and strategic direction of the company" while it seeks a CEO and to recruit a nonexecutive chairman.
Berman called Pendragon, which he described as the equivalent of AutoNation in the U.K., an "exceptional company" with "great assets, great people and great product."
He said it faces some of the same issues auto retailers do in the U.S., such as flattening sales, stair-step incentives and reduced new-vehicle profit margins. In addition, the company has reported setbacks in its used-vehicle business. Berman is charged with growing Pendragon's dealer management system company, leasing business, standalone used-vehicle brand and franchised business.
For the "foreseeable future, I'm going to continue in this role," Berman said.
Berman said the majority of his time will be spent in the U.K. "I don't get to phone it in," he said. "You've got to be there in person to get it done."
Berman said Pendragon will continue with its plans to sell its U.S. dealerships, which are in Southern California.
The company said in a financial update last month that deals are "progressing well" to sell Jaguar-Land Rover Newport Beach to US Auto Trust for about $38.7 million and Chevrolet Puente Hills in City of Industry for about $21.2 million.. A buyer wasn't disclosed for that store.
Pendragon, which in 2017 announced plans to sell its U.S. dealerships, already has sold two U.S. stores.
On July 1, Lithia Motors Inc. bought its first Jaguar-Land Rover store, Jaguar-Land Rover Mission Viejo. Pendragon said it netted $35.7 million in the deal. On July 2, 2018, Pendragon sold its Aston Martin store in Newport Beach to US Auto for about $4.1 million.
Last month, Pendragon said it expects to make about $124.7 million on the sale ofall U.S. dealerships. The company said itexpected a buyer could be found to complete the sale of the remaining U.S. business by year end, which also include Hornburg Jaguar-Land Rover in West Hollywood and Hornburg Jaguar-Land Rover in Santa Monica.
Pendragon, which formed in 1989, entered the U.S. market in 2000 when it acquired Bauer Jaguar.
Its most recent acquisition came in 2017, when it bought Chevrolet Puente Hills from Tom Hoffman and Gary Campbell. In December 2017, Pendragon announced it would sell its U.S. dealerships. "Given the strong performance of this division, we have concluded it is economically right to sell the business at this time to realize its value," the company then said.
While Pendragon is exiting the U.S. market, Erin Kerrigan, a sell-side adviser, said her firm continues to see interest from international firms in buying U.S. dealerships. More than 400 people from 35 other countries receive her firm's quarterly Blue Sky Report on the buy-sell market and many have contacted the firm about their interest in acquiring U.S. dealerships.
Kerrigan Advisors, based in Irvine, Calif., represented the sellers in the Chevrolet Puente Hils deal with Pendragon.
"We do not think the trend of international capital seeking investment in the U.S. auto retail sector will slow anytime soon," Kerrigan wrote in an email to Automotive News.
"One of the reasons that U.S. dealerships are so attractive is because they are protected by the strongest franchise laws in the world — which serve to maintain franchise value and make investing in auto retail less risky in the U.S., relative [to] other countries."
Pendragon is Europe's fourth-largest dealership group by revenue, according to Automotive News Europe's 2019 Guide to Europe's Biggest Dealers. It has 177 new-vehicle franchise points in the U.K.
Kerrigan Advisors is honored to work with auto retailers throughout the US to enhance the value of their enterprise. Learn more about our services below:
Customized and confidential sell-side services for higher value dealerships and dealership groups nationwide, with a proven record of achieving the highest sale price per transaction of any firm in the industry.
Capital raising and partnership structuring for growing dealership groups, supported by the largest investor database in the industry.
If you are a buyer in today’s market, Kerrigan Advisors welcomes the opportunity to learn about your acquisition criteria and include you in Kerrigan Advisors’ proprietary Buyer Database.
We welcome the chance to learn more about your acquisition criteria so that we can contact you in the event a client matches your investment profile.
Contact us to learn more about Kerrigan Advisors’ client services, or to have a conversation about the buy/sell market. All of our conversations are 100% confidential.