In addition to a few other dealer group moves this week, Sonic Automotive said Wednesday it has opened an EchoPark delivery center in Baton Rouge, La., the second location in the state for Sonic’s chain of standalone used-car stores.
There is also an EchoPark delivery center in New Orleans.
Sonic now has 33 EchoPark locations nationwide.
“We are excited to continue serving the needs of guests in Louisiana with the opening of our newest EchoPark delivery center in Baton Rouge,” Sonic and EchoPark chief executive officer David Smith said in a news release. “Our teammates are committed to providing an exceptional selection of high-quality, pre-owned vehicles, priced up to $3,000 below market, both in-store and online, with a hassle-free, guest-centered experience from start to finish.”
In other dealer group news, Continental Motors has sold its Continental Honda store in Countryside, Ill., to Gerald Auto Group, which is based in Chicago. That’s according to a news release from Kerrigan Advisors, which represented Continental in the sale.
“Honda is the No. 1 selling brand in Chicago, and Countryside is the third highest volume auto retail market in Chicago, so this was an exceptional acquisition opportunity with much interest in the market. It was critical that Kerrigan Advisors identify the right buyer to match Continental Honda’s stellar reputation,” said Gabe Robleto, who is vice president of the sell-side advisory at Kerrigan Advisors, in a news release.
“We are honored to represent Jay Weinberger again and to successfully manage his sale process to the Gerald Auto Group, a family-owned business with same values and goals for their business,” Robleto said
Elsewhere, Morrie’s Automotive Group has purchased Grand Ledge Ford Lincoln and Merrill Ford Okemos.
The Presidio Group advised Barry Merrill, president and owner of the dealerships, on that transaction.
“As I made the difficult decision to sell my dealerships and turn to the next chapter in my life, there was no better team to turn to for assistance than Presidio,” Merrill said in a news release from Presidio.
“I wanted a smooth transaction while making sure my loyal team members, many of whom have been with me for years, would be in good hands,” Merrill said. “The experienced professionals on the Presidio team understood my objectives and found the perfect buyer in Morrie’s, which has a history of dedication to both its employees and the communities in which it operates.”
Morrie’s Automotive Group CEO Lance Iserman said: “We were thrilled when The Presidio Group approached us with the opportunity to acquire our first franchises in Michigan.
“We were looking for strategic acquisitions in the upper Midwest, and these domestic brands have very loyal customers and great market appeal. We look forward to extending the fine customer service we are famous for to Michiganders, as well as being involved in the local communities,” Iserman said.
And in a LinkedIn post on Wednesday, Castle Automotive Group, which operates dealerships in Illinois and Indiana, announced it has purchased Fox Valley Volkswagen of Schaumburg in Illinois.
In comments included with the post, CEO Joe Castle said: “We are excited to expand our presence in Illinois with one of the greatest car companies in the world Volkswagen of America, Inc, especially in such a key market like Schaumburg, Illinois. The acquisition of Fox Valley Volkswagen of Schaumburg will further diversify our group’s overall portfolio and add to our geographic reach in the Midwest market."
Tuesday brought at least a trio of M&A moves among the public auto retailers, as the buy-sell market remains hot in retail automotive.
Starting with Asbury Automotive Group, it has completed its purchase of Stevinson Automotive, a deal that includes eight stores and adds annualized revenues of $715 million.
The eight Denver dealerships include two Lexus and two Toyota franchises, plus one Porsche, one Chevrolet, one Hyundai and one Jaguar franchise. The deal also includes a Land Rover open point.
“We are thrilled to add to our growing footprint in the dynamic and growing Denver area, especially through a well-respected and successful dealership group like Stevinson,” Asbury president and chief executive officer David Hult said in a news release.
“Many of Stevinson’s award-winning dealerships are ranked as some of the best in the country, but what makes this group special are its people and the culture they have built over its 60-year history,” he said. “Stevinson’s 600 plus team members are talented professionals who are dedicated to the guest experience and aligned with our North Star of being the most guest-centric automotive retail company.”
Hult added: “We are excited that Kent has agreed to stay on and guide Asbury through the real estate and construction projects in Colorado.”
Kent Stevinson, the group owner, added: “After meeting with David Hult and the Asbury team and getting to know them, I knew that their business approach, their philosophy toward employees and customers mirrored our own here at Stevinson. I look forward to David and his exceptional team continuing the Stevinson legacy for another 60 years.”
Next up, Lithia & Driveway said Tuesday it has acquired two Michigan and one Florida Ford store from Elder Auto Group: Elder Ford of Tampa, Elder Ford of Troy ad Elder Ford of Romeo.
This trio of stores are projected to add annualized revenues of $425 million, bringing Lithia’s total expected annualized revenue acquired this year to nearly $7 billion.
“The Elder Auto Group has an impeccable reputation for quality customer service, a passion for all things Ford and will be a seamless fit,” Lithia & Driveway president and CEO Bryan DeBoer said in a news release. “We are excited to welcome Robert Elder and these strong, high-performing teams to the Lithia & Driveway family.”
Meanwhile, Sonic said Tuesday it has closed its purchase of RJF Auto Partners, a deal first announced in September.
RFJ Auto has 33 stores in seven states and 16 brands in its portfolio. Bringing the group into the fold gives Sonic a presence in six additional states and adds five brands to its portfolio.
RFJ is likely to add annualized revenues of $3.2 billion, which would be incremental to Sonic’s 2025 target of $25 billion in total revenues.
“We are thrilled to welcome Rick Ford and the entire RFJ Auto team into the Sonic family,” Sonic and EchoPark CEO David Smith said in a release.
“Our teams share a common culture and vision, continuously striving to deliver a best-in-class guest experience and a commitment to teammate growth and development,” Smith said. “We look forward to capitalizing on our complementary strengths and values as we grow the combined business and expand our nationwide reach.”
Sonic and EchoPark president Jeff Dyke said, “We are excited to complete the acquisition of RFJ Auto and are ready to hit the ground running as one company. RFJ Auto’s geographic footprint, brand portfolio, and proprietary processes complement our existing business model and align with our strategy to continue driving growth in our franchised dealership business.”
Added RFJ CEO Rick Ford: “The RFJ Auto team has been looking forward to this day and reaching this critical milestone. I’m personally excited to be rejoining the Sonic family, working alongside David, Jeff, and the Sonic team to continue delivering an exceptional experience to consumers across the country.”
In an Auto Remarketing interview late last month, Sonic Automotive chief financial officer Heath Byrd was discussing the M&A landscape in auto retail, and said that, “other than shortage of inventory in new, there's probably not a better time in our lifetimes to be in automotive retail.”
He added: “And even (with) the shortage, we've all made more money — including
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Sonic Automotive said Tuesday it has acquired Cook Volkswagen in Fallston, Md.
The dealership, will has been renamed Volkswagen of Fallston, is the 89th franchised location for Sonic.
The store, which is 30 miles from Baltimore, is also Sonic’s fourth VW location.
“We are excited to expand our automotive sales and service network with Volkswagen of Fallston,” Sonic Automotive and EchoPark Automotive chief executive officer David Smith said in a news release. “The successful longevity of this dealership franchise in the Maryland market, combined with the strength of the Volkswagen brand and group of dedicated teammates, aligns with our company’s strategy of providing an exceptional experience to consumers in new markets and attaining $25 billion in revenues by 2025.”
Sonic and EchoPark president Jeff Dyke added: “This is our fourth acquisition of the year, and we are thrilled to welcome the team from Volkswagen of Fallston into our growing family. We are looking forward to continuing our partnership with the Volkswagen brand and extending our exceptional guest experience, quality vehicles, and competitive pricing to consumers in Maryland and surrounding areas.”
Lithia makes another move in Canada
In related news, Lithia & Driveway said Tuesday it has purchased Pfaff Harley-Davidson in Toronto.
The purchase is Lithia’s first foray into powersports and motorcycles.
“We are delighted to join the Harley-Davidson dealer family through this partnership with our team at Pfaff Automotive,” Lithia president and CEO Bryan DeBoer said in a release. “Harley-Davidson is a storied brand with a rich history, passionate owners, and a premium product lineup that is well aligned with our business model.”
This move follows Lithia’s acquisition of Pfaff Automotive Partners in late August, which represented the retailer’s first-ever purchase outside of the U.S.
Sonic Automotive has added its first Chrysler Dodge Jeep RAM franchise.
The retailer said Tuesday it has purchased Bobby Ford Chrysler Dodge Jeep RAM in Sealy, Texas.
The dealership, which has been renamed Momentum Chrysler Dodge Jeep RAM of Sealy, is Sonic’s 88th franchised dealer location.
“We continue to enhance our automotive sales and service network in the state of Texas, with the addition of the Chrysler Dodge Jeep RAM brands to our franchised dealership network,” Sonic Automotive and EchoPark chief executive officer David Smith said in a release. “This represents our third completed acquisition this year, which, combined with pending acquisitions, puts us on pace to exceed our previously announced goal of reaching $25 billion in revenues by 2025.”
Added Sonic and EchoPark president Jeff Dyke: “We’re excited to add our first Chrysler Dodge Jeep RAM dealership to our growing network. The strength of the Bobby Ford team and the CDJR brands will jumpstart our brand expansion efforts, setting the stage for additional CDJR locations we plan to begin operating in the Northwest later this year as part of the recently announced RFJ Auto Partners acquisition.
“Our team is ready to deliver an exceptional guest experience and competitive pricing to CDJR consumers in the great state of Texas and beyond,” Dyke said.
Sonic wasn’t the only public retailer making moves this week.
Group 1 Automotive announced the purchase of Capital City Honda in Sacramento, Calif., on Monday.
The store is expected to bring in annualized revenues of roughly $85 million.
“We’re extremely pleased to welcome the team at Capital City Honda to the Group 1 family. We're looking forward to expanding our relationship with Honda and the local community in Sacramento,” said Daryl Kenningham, Group 1’s president of U.S. and Brazilian operations, in a release.
Hello Auto Group has grown its Southern California presence with two new dealerships: John Hine Mazda Temecula and John Hine Subaru Temecula.
The acquisition was finalized on Oct. 4. The John Hine franchise has been a respected name in California for more than 60 years, while Hello Auto Group is a relative newcomer to the comunity. However, the dealer group's leadership team have longstanding experience with the Subaru and Mazda brands.
"John Hine and his dealerships have been mainstays in the Temecula community for years," said Karl Schmidt, Hello Auto president, in the press release announcing the purchase. "We look forward to carrying on the Hine tradition and growing the bond with the local automotive community."
John Hine, president of John Hine Mazda and Subaru, also noted in the release: "I've known Karl for the better part of two decades. We are like-minded in our commitment to the customer experience and the belief that high levels of customer satisfaction can only be achieved through employee satisfaction."
Hello Auto Group is based out of Valencia, Calif., and is focused on "being upfront, seamless and devoid of the anxieties associated with auto dealerships," the company said. Hello Auto Group intends to maintain all employees at the newly acquired Temecula locations, and expand the team for future growth.
"In developing and growing Hello Auto Group, we've been able to do everything we've wanted to do elsewhere, but haven't been able to," said Schmidt. "Given the overwhelming reception we've seen in Valencia, I'm positive we'll continue the lasting connection John and team have made in Temecula and San Diego."
The wave of M&A activity has been one of the biggest storylines in the auto industry this year, particularly among dealers and dealer groups, and that continues as October gets underway.
Starting with some news involving CarMax, the retailer has finished divesting its new-car dealership franchises with the sale of CarMax Kenosha Toyota to the Rydell Company, according to Haig Partners, which was the sell-side advisor for CarMax in this transaction.
“We made the decision to sell our Kenosha Toyota new-car store to allow us to continue to focus on our core business of delivering an exceptional used-car buying and selling experience,” CarMax chief financial officer Enrique Mayor-Mora said in Monday’s news release from Haig Partners.
“We appreciate the strong relationship we have with Haig Partners and have worked with Kevin Nill for more than 20 years,” Mayor-Mora said. “Our experience with the company enhanced our trust and confidence that we would be represented with integrity and ensure this transaction would be completed successfully.”
Nill, who is a partner at Haig, said: “The team at Haig Partners appreciates the continued trust CarMax has in our firm to support their strategic focus on their used-car operations.
“We are honored to have been the exclusive sell-side advisor on the sale of the CarMax Kenosha Toyota store as well as the previous sale of CarMax Laurel Toyota,” Nill said. “We are grateful for the opportunity to bring our depth of relationships and industry expertise to CarMax, enabling us to navigate all aspects of this sale and match CarMax with a great organization.”
Elsewhere on Monday, it was announced DCD Automotive Holdings acquired Tarbox Toyota Hyundai in Rhode Island, which has been renamed Nucar Tarbox Toyota and Nucar Tarbox Hyundai.
That deal was announced in a news release from DCG Acquistions, a Dave Cantin Group company, which facilitated the transaction.
“We are pleased to have closed on this critical acquisition and to continue setting the standard in securing legacies,” DCG founder and chief executive officer Dave Cantin said in a news release. “Our unmatched success is made possible by our team's unparalleled knowledge base and professionalism, relentless hard work, and unyielding commitment to our clients.
“Through creative thinking and problem-solving, DCG ensures a beneficial and painless process for all parties involved in an acquisition,” Cantin said. “It is because of all of these attributes that we have achieved the most successful year in company history.”
And over the weekend, buy-sell advisor Performance Brokerage Services announced that Westfall-O’Dell — which is a collection of six commercial truck dealerships and a parts distribution center located throughout Colorado, Wyoming, Kansas and Missouri — has been sold to Nextran Truck Centers.
The deal bumps Nextran’s footprint up to 25 locations.
Dan Argiro, who is the commercial truck partner at Performance Brokerage Services, facilitated the transaction.
Asbury Automotive Group has agreed to buy Larry H. Miller Dealerships and Total Care Auto from the Larry H. Miller Group of Companies, the retailer announced Wednesday.
The acquisition — which has a $3.2 billion aggregate purchase price that includes roughly $740 million in real estate — would bring one of the country's largest dealership groups and its more than five dozen Western U.S. stores into the Asbury family, along with a service contract and vehicle protection product provider.
The purchase would add annualized revenues of roughly $5.7 billion.
It would also bring Arizona, Utah, New Mexico, Idaho, California and Washington to Asbury’s footprint, and increase the retailer’s presence in Colorado. The 60-plus locations added to the Asbury group would include 54 franchised dealerships, seven used-car stores and 11 collision centers.
“Larry H. Miller Dealerships is one of the most respected automotive dealer groups in the United States with a strong culture and stewardship mentality,” Asbury president and chief executive officer David Hult said in a news release. “This acquisition is a unique opportunity to rapidly expand Asbury’s presence into these desirable, high-growth Western markets with strong accretion from day-one, with this impressive group and its rich history.”
Hult added: “Larry H. Miller Dealerships is a well-run operation with long tenured employees and a senior leadership team equaling over 5,300 passionate team members, all of whom have had a part in building and carrying forward the legacy that Larry H. and Gail Miller founded over 42 years ago.
“We are thrilled to grow our presence in these states that we believe have appealing economic and demographic growth opportunities while broadening our geographic reach. Our now national footprint, complemented by our digital purchasing capabilities in Clicklane, creates a truly expansive omni-channel platform of dealerships,” he said.
“This acquisition will further diversify our total portfolio mix and add approximately $5.7 billion in expected annualized revenues, which positions us well to execute our five-year plan to generate $20 billion in annual revenue by 2025. With these acquisitions, we will exceed our previously published five-year target for M&A within the first year of the plan. We will continue to seek acquisitions that fit our culture and strategy.
“We believe that this acquisition is truly transformative for Asbury, and we are honored to be the stewards of Larry and Gail’s vision. Additionally, we expect this acquisition to be highly accretive to earnings per share in 2022 and beyond.”
The deal also includes the purchase Total Care Auto, Powered by Landcar.
“TCA is comprehensively integrated with Larry H. Miller Dealerships and presents a compelling opportunity for Asbury to enter this profitable F&I business,” Hult said. “Like the dealerships, this service contract company is extremely well run. TCA has historically delivered 20%+ EBITDA margins on average.”
The acquisition is expected to close in the fourth quarter.
“Since our family’s purchase of a single Utah dealership in 1979, we have been honored to cultivate a strong, values-based culture and customer-first business model within the automotive industry for more than four decades,” Larry H. Miller Group of Companies owner Gail Miller said. “We feel a great sense of stewardship to our incredible associates and their families, to our loyal customers and partners, and to the communities where we operate.
“As always, we believe that being in business is a means to doing good, and this transaction will elevate our ability to continue to enrich lives through our philanthropic efforts as well as reinvest in new ventures.”
Larry H. Miller Group of Companies CEO Steve Starks added: “We are proud that Larry H. Miller Dealerships has grown to be one of the largest automotive retailers in the country. Our incredible employees will have the opportunity to be part of Asbury, another well-respected and trusted brand, that brings a national footprint with a best-in-class technology platform. This transaction provides additional opportunities for the LHM Group to further diversify and grow our portfolio of businesses and investments.”
In a late-July interview with Auto Remarketing, Sonic Automotive president Jeff Dyke discussed the group’s potential for expansion in regions of the country where it wasn’t yet operating.
Such growth came to fruition in a big way Wednesday, as Sonic announced it has agreed to purchase RFJ Auto Partners for $700 million — a move set to give the Charlotte, N.C.-based dealer group a presence in six new states: Washington, Idaho, Montana, New Mexico, Indiana and Missouri.
The transaction would also bring in five new brands to Sonic’s lineup — Chrysler, Jeep, Dodge, RAM and Mazda — and bump Sonic’s franchised dealer store count above 100.
“This transaction is well-aligned with our strategy to grow our franchised dealership business by acquiring franchises that increase our geographic reach and expand our brand portfolio,” Dyke said in Wednesday’s news release.
“With my 20-plus year history with Rick Ford and much of his team, I very much respect and admire what a terrific job they have done growing and modernizing their business and see great synergies with the anticipated launch of our industry-leading digital omnichannel platform later this year,” Dyke said of RFJ Auto’s chief executive officer, who previously worked at Sonic. “Beyond that, I am excited to once again work alongside Rick and his team as they remain in place to manage and accelerate our growth trajectory under this new partnership.”
The acquisition of RFJ Auto — one of the 15 largest dealer groups in the country based on total revenues — is likely to make Sonic one of nation’s five largest dealer groups by that same measure, the retailer said.
RFJ Auto has 33 stores throughout seven states and includes 16 brands in its portfolio. It posted revenues of $2.8 billion last year.
Sonic expects that RFJ Auto will add annualized revenues of $3.2 billion.
The retailer said that’s an incremental increase of 30% in franchised dealership revenues above its target of $25 billion in total revenues by 2025.
The total purchase price of $700 million includes both blue sky/goodwill and real estate, the retailer said.
Sonic said the deal would be one of the largest ever for auto retail.
“We are very excited to welcome the RFJ Auto team to the Sonic family as we continue to expand our nationwide network,” Sonic Automotive and EchoPark Automotive chief executive officer David Smith said in a news release.
“RFJ Auto’s management team — many of whom are former members of the Sonic family and have deep familiarity with our guest-centric mindset and innovative sales model — and the nearly 1,700 RFJ Auto teammates are an excellent fit with the culture and growth strategy of our franchised dealership business,” Smith said. “As such, we anticipate seamless integration and expect to capture meaningful synergies from ‘day one,’ creating significant long-term value for our shareholders.”
Ford, the RFJ Auto CEO, added: “As a past member of the Sonic family, I know exactly how complementary our businesses are and I look forward to bringing together our shared commitment to guest satisfaction, innovative processes, and industry-leading technology for the benefit of all of our guests, teammates and stakeholders.”
The move continues what has been an active buy-sell period for Sonic’s franchised dealership operations.
The retailer announced Sept. 1 it had purchased Colorado’s Audi Glenwood Springs and Glenwood Springs Volkswagen.
That move followed another transaction in the state just over a month earlier.
In late July, Sonic announced it had purchased Grand Junction Subaru and Grand Junction Volkswagen.
Shortly following that purchase, Auto Remarketing connected with Dyke, the Sonic president, who shared more about the retailer’s plans to increase its presence on the franchise new-car dealer side.
At the time of that late-July interview, the geographic footprint of Sonic’s franchised dealerships, for the most part, included the majority of the Southeast and the Washington, D.C. area, plus Texas, Colorado, Nevada and California.
The retailer saw room for growth in regions of the country in which it didn't yet have a presence.
“We’ve got acquisitions working right now that are literally from coast to coast from the North to the South … we're just now diving back into the pool from an acquisition perspective,” Dyke said that interview.
“And so, we're going to grow that side of the business. And we can now because we’ve got the capital to do it,” Dyke said. “So, you’ll hear more about that as we move forward in the coming couple of months. But for sure, we’ll delve into markets that we don’t do business in today.”
Adding its 10th dealership to its New Jersey lineup, World Auto Group has purchased the Subaru dealership in Hackettstown, N.J., on Route 46. The dealer group said the store will now operate as Subaru World of Hackettstown.
This news comes less than a year after purchasing New Jersey's Audi Newton dealership.
The new dealership (Subaru World of Hackettstown) is the dealer group's second Subaru store. This new store joins the dealer group's Subaru World of Newton, which serves the Sussex County area.
"The continued expansion of our dealership portfolio is something all of us at World Auto Group are really excited about, especially since we've acquired a reliable marque like Subaru," World Auto Group executive vice president Matt Luzio said in a news release. "This additional Subaru location will allow us to further strengthen our group's service offerings and automotive sales to residents all across northern New Jersey. More importantly, we can continue our commitment to helping local communities, which has always been a key objective for us at World Auto Group."
The new World Auto Group Subaru location will offer a collection of new and pre-owned vehicles, an array of financing solutions, vehicle services and a "dedicated team," the dealer group shared.
World Auto Group includes Audi Bridgewater, Audi Mendham, Audi Newton, Nissan World of Springfield, Toyota World of Lakewood, Toyota World of Clinton, Toyota World of Newton, Subaru World of Newton, Volkswagen World of Newton and now Subaru World of Hackettstown.
