Private Groups Buy More Dealerships Featured
04 December 2017
The auto dealership buy/sell market is poised for its most active year ever, with over 200 transaction closings projected for 2017, according to The Blue Sky Report released by Kerrigan Advisors.There were 149 dealership buy/sell transactions completed in the first nine months of 2017, compared to 172 transactions in the first nine months of 2016. After hitting a plateau in 2015, buy/sell activity declined slightly in the first nine months of 2017, but is still tracking to be one of the most active years on record.Multi-dealership transactions represented one quarter of the completed sales in the first nine months of 2017. Kerrigan Advisors expects at least 51 multi-dealership transactions will close this year.Year to date, domestics’ share of the buy/sell market increased to 49 percent, up 18 percent from 2015.Non-luxury and luxury import franchises’ buy/sell market share declined.Public retailers’ U.S. acquisition spending increased 61 percent in the first nine months of 2017 compared to the first nine months of 2016.Private dealership groups represent the largest share of dealership acquirers. Of the estimated 236 franchises, which changed hands in the first nine months of the year, only 23 were acquired by public companies.Real estate, for most dealers, is their most valuable asset, far exceeding franchise value. Kerrigan Advisors estimates dealership real estate prices rose 3 percent in the first nine months of the year.