The parade of records connected with franchised dealerships just keeps on marching.
According to the Second Quarter 2021 Blue Sky Report by Kerrigan Advisors, the dealership buy/sell market hit yet another historic high, with 320 transactions completed in the 12-month period since the economy re-opened in June 2020.
Spiffy said Wednesday it has purchased Pit Crew, an acquisition that not only expands the on-demand car care, technology and services company into Tennessee, but is likely to bring new preventative maintenance services into the Spiffy fold.
Pit Crew, which operates in the Tennessee cites of Nashville, Memphis and Knoxville, has primarily focused on oil and tire change services since its launch in August 2018. However, Pit Crew has dipped it toes into new services like providing replacement batteries, wiper blades, headlights and tail lights.
“Spiffy aims to gradually incorporate these services into its service offerings for individuals, as well as fleet clients through their Fleet Management as a Service (FMaaS) model,” the company said in a news release.
Spiffy chief executive officer Scot Wingo said in the release: “We’ve had our sights set on Tennessee for some time, and we quickly realized that the team at Pit Crew is doing a phenomenal job in Nashville, Memphis and Knoxville.
“Our companies are aligned in completely owning the customer experience for both consumer and fleet, which makes this acquisition exciting for both sides. We can’t wait to take what they’re doing nationwide while bringing wash and detail to these new cities in Tennessee.”
Pit Crew was co-founded by Harrison Collins, Adam Major and Josh Tillery, each of who will remain with the company to help with the transition and then move into new positions with Spiffy.
“When you transition your entire company and everything that you've worked hard to build, you want to feel certain about where you're hitching your wagon. Both (Spiffy co-founders) Scot and Karl have affirmed a lot of the factors that we were hopeful for,” Collins said in the release.
“Everyone at Spiffy has been so accommodating and energized, from leadership down to supervisors and technicians. It feels like the merging of two great families and for that, we're thrilled and grateful.”
Ivette Dominguez Drawe and Michael Drawe began a relationship when they were both working in management positions at Sonic Automotive, leading them to getting married.
Now the couple along with business partner Rick Jones are growing their own dealership group.
According to a news release from Performance Brokerage Services distributed on Friday, the trio purchased Don Carlton Acura of Tulsa, Okla., from Brenda Carlton.
The announcement indicated the dealership will remain at its current location at 4905 South Memorial Drive in Tulsa and be renamed Post Oak Acura.
Don Carlton Acura of Tulsa was established in 1995. Performance Brokerage Services noted the Don Carlton Auto Group is family owned and operated and has been in the automotive industry for more than 40 years.
Performance Brokerage Services said Brenda Carlton remains the dealer principal at Don Carlton Honda of Tulsa, which has been in the community since 1975.
Meanwhile, Ivette Dominguez Drawe and Michael Drawe have been growing their dealership portfolio since 2005 when they fulfilled one of their lifetime goals and purchased their first dealership — Alpine Buick Pontiac GMC in Denver from Sonic.
In 2017, the couple partnered with Jones, a long-time friend and former employee, to buy their second dealership, Cardinal Buick GMC in Bellville, Ill. Dominguez Drawe and Michael Drawe continued to serve as president and vice president, respectively, of their Denver store, while Jones served as operating partner in Illinois.
Performance Brokerage Services highlighted that the group has continued to expand in recent years, adding dealerships in Colorado, Illinois, Missouri and Oklahoma. The purchase of Don Carlton Acura of Tulsa marks their second acquisition in Oklahoma.
Following the sale, Jones said in the news release, “We have done two deals with Paul Kechnie from Performance Brokerage Services as we focus on our St. Louis and Oklahoma markets. Paul and Performance are our go to for future acquisitions.”
Kechnie was the exclusive agent for this transaction and is the Texas and Midwest partner for Performance Brokerage Services.
“It has been a pleasure to watch first-hand the growth and success of Ivette Dominguez Drawe, Michael Drawe and Rick Jones,” Kechnie said in the news release. “This group is the gold standard when it comes to their commitment to philanthropy and enhancing their communities. We wish them much success with their recent acquisition and look forward to bringing them additional opportunities in the future.”
Performance Brokerage Services mentioned Dominguez Drawe is active in her community and has an impressive history of supporting various organizations, especially minority, children and women’s causes. She sits on General Motors’ Minority Dealer’s Advisory Council representing Hispanic GM dealers and is a member of the GM Women’s Retail Initiative.
The Presidio Group again served as the advisor to dealerships changing hands.
According to a news release from the firm, the Presidio Group played a role in the sale of Tysinger Motor Co. and its five dealership franchises to Mills Automotive Group.
The transaction included Audi, Hyundai, Genesis and Mercedes-Benz dealership franchises as well as a Mercedes-Benz Sprinter commercial van franchise. All are located in the Hampton Roads region of Virginia.
“These franchises complement our growing dealership group,” Mills Automotive Group chief executive officer Damian Mills said in the news release. “(Mark Tysinger’s) stellar mix of franchises in the diverse and growing Hampton Roads region is a perfect fit for our continued geographic and brand expansion.
“We look forward to building upon the strong culture and tradition of community involvement established by Mark Tysinger and his family and welcome the amazing team members of the Tysinger dealerships to our family,” Mills added.
The Presidio Group highlighted the Hampton Roads region is home to the headquarters of three Fortune 500 companies. The firm said it is the eighth largest metro region in the Southeast U.S., with a fast-growing population.
“We were privileged to work with Mark Tysinger and his family on this transaction,” said George Karolis, president of the Presidio Group. “Tysinger has been an iconic brand in the region for nearly a century, with deep roots in fostering a thriving culture for its employees and the local community at large.
“It was of the utmost importance to find the right buyer in Mills Automotive Group to continue building upon this culture and legacy,” Karolis continued.
Mark Tysinger’s great grandfather, John Lloyd Tysinger, entered the retail automotive business in 1926 when he opened a General Motors dealership. He opened a Mercedes-Benz dealership in 1964 in an area that was not considered demographically suited for the premium brand.
“We have worked on many transactions involving the sale of a dealership group that has been in a family for multiple generations before the family decides to strategically diversify,” said Brodie Cobb, founder and CEO of The Presidio Group. “We bring considerable expertise to the table for these transactions and were honored to have assisted the Tysinger family in achieving its goals.”
Mark Tysinger corroborated the firm’s assessment of the process.
“The team at Presidio understood that we were selling a dealership group that has been in our family for nearly 100 years and we wanted a buyer that would not just protect but enhance our legacy,” Tysinger said. “With their extensive industry knowledge, they were able to accurately value my dealerships and find the perfect buyer.”
And Mills added, “I was especially impressed with the professionalism of the Presidio Group throughout the course of this significant acquisition for our company.”
South Patterson of Patten, Wornom, Hatten & Diamonstein served as legal counsel to the Tysinger Motor Company. Gregory Humphries of Shutts & Bowen served as legal counsel to the Mills Automotive Group.
The Presidio Group pointed out that it has now closed five transactions in 2021 representing 76 dealership franchises, with combined revenues in excess of $3 Billion.
“We expect 2021 to continue to be one of our most active years to date,” Karolis said.
Haig Partners highlighted how lucrative it has been to be a franchised dealer, especially since the midpoint of 2019.
According to Q2 2021 Haig Report, the firm discovered through its project that tracks trends in auto retail and how they impact dealership values that for the 12-month period that ended June, average adjusted dealership profits reached $3.1 million, a record high and more than double average profits in 2019, the last year before the pandemic hit.
The indicated the blue-sky value for a typical privately-owned dealership has increased 52% since 2019 to reach $10.3 million, according to Haig Partners’ estimate, also at a record high level.
As a result, Haig Partners said buy-sell activity has also exploded with an estimated 422 dealerships sold during the 12-month stretch through the end of June. That’s 41% more than in 2019 before the pandemic.
Haig Partners went on to note that there have been more dealership sales during the last 12 months than in any other period since 2015 when Berkshire Hathaway acquired the Van Tuyl Group.
“It’s an odd time when an empty lot means an overstuffed wallet. Consumers have cash to spend but automakers are not able to produce enough units to meet demand due to a lack of microchips. Dealers are enjoying these unprecedented conditions of high margins and low expenses which are leading to record high profits and record high dealership values,” Haig Partners president Alan Haig said in a news release.
“Buy-sell activity is surging as buyers are eager to acquire more stores. Prior to the Pandemic we were tracking 75-90 dealerships sold per quarter and in Q2 2021 alone we saw 120 dealerships change hands,” Haig continued
“And since the lack of inventory is projected to last through the end of the year and beyond, we are expecting to see elevated profits and blue-sky values for some time,” he added.
The report showed public company spending on acquisitions has significantly increased.
In just the first six months of 2021, Haig tabulated that publicly traded groups spent almost $2.0 billion on acquiring dealerships, 756% more than they did in the first six months of 2020. The firm explained this massive increase is attributable primarily to Lithia, which alone spent $1.4 billion acquiring dealerships during the second quarter.
Haig went on to mention that equity valuations for the publics are 109% higher than they were before the pandemic.
“We expect Lithia to continue its aggressive pace and while they have been the most active buyer, the other public traded companies have also increased their rate of acquisitions,” the firm said.
“Group 1 acquired two Toyota dealerships that Haig Partners represented in Q1. In Q2, Penske and Sonic closed on acquisitions and AutoNation announced a sizeable deal,” the firm continued. “In addition to acquiring new car franchises some of the public buyers are also investing in used-car dealerships.”
For more information or to obtain the entire report, visit www.haigpartners.com.
The retail footprint of Lithia & Driveway just keeps growing.
On Tuesday, the company announced the acquisition of Rock Honda, a Top 20 Honda New Volume Dealer in the U.S. The company highlighted the purchase of this high-performing Honda dealership in the Inland Empire continues its “fast-paced growth trajectory” and expands the reach of its omni-channel network.
The company recapped that Rock Honda is located in Fontana, Calif., and was the 16th largest New Volume Honda store in the nation in 2020.
In addition to vehicle sales and service, Rock Honda is also licensed to provide customers with personal insurance as part of their consumer offerings.
LAD projected that Rock Honda is expected to generate $170 million in annualized revenues, bringing its total expected annualized revenue acquired to date in 2021 to more than $4.9 billion.
Lithia pointed out that it is pacing ahead of five-year plan to achieve $50 in earnings per share (EPS) and $50 billion in revenue by 2025.
This purchase was financed using an existing on-balance sheet capacity, according to the company.
“We are excited to reach more consumers in the Southwest region and welcome the Rock Honda team to the Lithia & Driveway family,” president and chief executive officer Bryan DeBoer said.
“This high-performing, customer-focused store expands our omni-channel network and introduces a new adjacency with personal insurance products, further complementing our ability to provide consumers transportation solutions wherever, whenever and however they desire,” DeBoer went on to say.
Fuccillo Automotive Group has sold its Fuccillo Nissan of Clearwater to Morgan Auto Group, according to Kerrigan Advisors, which represented and advised Fuccillo.
This is the fifth Florida dealership sold by Kerrigan on behalf of Fuccillo since December 2019. The transaction is the 121st dealership sale that Kerrigan has led since 2015 and its ninth in the past 28 months.
Morgan Auto Group, meantime, has 46 stores throughout the Tampa, Gainesville, Ocala, Lake City, Jacksonville, Sarasota, Naples, Fort Myers, Brandon, New Port Richey and Orlando markets of Florida.
“This was a match that just made sense. Our goal was to make sure that Nissan of Clearwater continued to serve the community with the highest of standards, and Morgan Auto Group’s deep roots in Florida, and superlative record, should ensure just that,” Fuccillo Automotive Group president Billy Fuccillo Jr. said in a news release. “Once again, Kerrigan Advisors demonstrated their strategic expertise and comprehensive knowledge of our market with another seamless transaction.”
Kerrigan Advisors vice president Gabe Robleto said in the release: “From our prior work with the Fuccillo group, we knew the importance of the relationship between the Fuccillos and the Florida communities they serve, as well as the significance of their legacy in the state. We are proud to have had the opportunity to preserve that legacy as we shepherded the group through another successful transaction in today’s dynamic auto retail buy/sell market.”
Kerrigan Advisors managing director Ryan Kerrigan said: “The Florida auto retail market is incredible, and certainly among the best in the United States. As evidenced by this transaction, all franchises in Florida can generate significant profits, strong buyer demand and, ultimately, high valuations.
“It has been our pleasure to work with the Fuccillo family over the last several years to monetize their decades of hard work. Working with dealer families, and helping them make generational planning and legacy decisions, is one of the most fulfilling parts of our work at Kerrigan Advisors. We have been honored to do this for the Fuccillo family.”
Dealership mergers and acquisitions aren’t just involving large groups absorbing multiple rooftops nowadays.
Performance Brokerage Services aided in the transaction of a North Carolina franchised store from a single owner to a married couple looking to relocate and run their own store.
On Thursday, Performance Brokerage Services announced the sale of Baker Chevrolet in Red Springs, N.C., from Fred Baker to John and Bridget Carlson.
According to a news release, Baker wanted to become a Chevrolet dealer since age 13. He grew up in the business as his father was a Volkswagen dealer in Concord, which is outside of Charlotte. On July 28, 1987, Baker purchased Baker Chevrolet from the original owner of the franchised dealership in eastern North Carolina.
Courtney Bernhard of Performance Brokerage Services said in the news release, “Working with Fred has been an absolute blessing. His patience to get through this transaction was greatly appreciated and speaks to his character. After meeting his son and lovely wife at the closing, it’s clear why they have been in business for 34 years. I was honored to be able to help Fred retire.”
Baker described what it was like to relinquish the business so dear to him.
“When it came time to sell my Chevrolet dealership, it wasn’t an easy decision,” he said. “I would like to thank Courtney Bernhard from Performance Brokerage Services for putting this deal together and connecting us with a buyer within 30 days of putting the store on the market. Courtney guided both me and the buyer through the entire transaction and kept us informed every step of the way.”
George Chaconas, the exclusive advisor for this transaction and the Southeast partner for Performance Brokerage Services explained how the sales process began.
“Attorney Robert Bass introduced me to Fred Baker who was considering selling his Chevrolet dealership in North Carolina,” Chaconas said. “I had a previous relationship with Fred’s son, Carson, in the powersports industry, so it was a real pleasure to help the family sell their dealership after 34 years.
“I would like to thank our partner, Jason Stopnitzky, in California for introducing us to the buyer, John Carlson. Courtney worked directly with the buyer the entire transaction, and did a fantastic job facilitating and managing the roadblocks along the way,” Chaconas continued.
“I would like to congratulate Fred on his retirement and long-standing service to the community and wish much success to the Carlson family with their new Chevrolet dealership,” Chaconas went on to say.
John Carlson is a former Marine who has spent more than 25 years in the automotive industry. According to Performance Brokerage Services, Carlson always had a dream of owning a dealership.
When he decided to turn the dream into a reality, John Carlson reached out to Performance Brokerage Services to make it happen. John and Bridget Carlson have five children and one grandchild and have been residing on the West Coast. They always knew they wanted to return to the East Coast, so the Baker Chevrolet opportunity was the perfect fit.
“We were looking to acquire our first new franchise automotive dealership and upon the advice of a mentor, we reached out to Performance Brokerage Services,” John Carlson said in the news release. “George Chaconas and Courtney Bernhard exceeded all of our expectations. They guided us through the entire process and got us through a lot of unchartered territory.
“We would not be the owners of our own Chevrolet dealership today without them. I would like to thank Courtney and George for their help and we look forward to acquiring more stores in the future with them,” Carlson continued.
Bernhard touched on what made this transaction unique.
“Working with first-time buyers can be a challenge,” Bernhard said. “However, John and his wife Bridget were phenomenal and on top of every hurdle along the way.
“The attorneys on both sides of the transaction were instrumental in getting this deal to the finish line, and I was very fortunate to be a part of it all. I wish everyone continued success and look forward to crossing paths again in the near future,” Bernhard went on to say.
The dealership will remain at its current location at 914 East Fourth Avenue in Red Springs and will be renamed Carlson Chevrolet.
The seller was represented by Logan Parker from Bass Sox Mercer.
The buyer was represented by Les Chayo of Chayo Law.
Over the last five years, Performance Brokerage Services said it has represented for sale more than 200 automotive dealerships.
AutoWeb has purchased used-vehicle acquisition platform CarZeus from founder Phil Kandera and McCombs Family Partners in a $400,000 all-cash transaction announced Monday.
CarZeus, which is currently available in the San Antonio market, is designed to buy cars directly from consumers and then wholesale those vehicles.
Bringing CarZeus into the AutoWeb fold can help the company “participate more meaningfully in the consumer used vehicle disposal market, which is highly fragmented and very large,” AutoWeb said in a news release.
Citing industry estimates, AutoWeb estimates that the market has an annual vehicle volume of 25 million units valued at a combined $230 billion.
“As a matchmaker, AutoWeb helps guide consumers through the large, complex, and multi-choice transaction of purchasing a vehicle. Providing our in-market audience with this alternative to dispose of their current vehicles is a natural product line extension,” AutoWeb president and chief executive Jared Rowe said in a news release. “CarZeus offers an alternative disposal experience for consumers seeking to sell their cars. We believe that AutoWeb’s unique ability to efficiently identify in-market car buyers is a key differentiator that will allow us to match more of those consumers to the vehicle disposal experience they prefer.”
The company said the deal supports its product investment strategy designed to offer “useful consumer experiences” via platforms like Car.com and UsedCars.com.
And this approach also helps retails find a new source for used-car inventory, the company said.
Rowe said AutoWeb shoppers are “already cross-shopping new and used vehicles online, most often with vehicle disposal as a component of their ultimate transaction or set of transactions. We plan to adopt an omni-channel engagement model that incorporates retail-ready functionality and services, like vehicle disposal, to deliver improved value to both clients and consumers.”
Kandera founded CarZeus in 2017. He has joined AutoWeb as executive director of vehicle acquisition and will head up the used-car acquisition business, which will operate under the CarZeus brand.
“McCombs Family Partners is proud to have guided CarZeus through its initial stages of growth and success,” said Joe Shields, director of business development for McCombs Family Partners, in a news release. “AutoWeb is well-positioned to guide CarZeus from here, so it can reach its full potential.”
This purchase continues a series of similar moves in retail automotive.
CarGurus, which purchased a majority stake in CarOffer this winter, announced last week the launch of CarGurus Instant Max Cash Offer, a CarOffer-powered platform that allows dealers to acquire used cars online from consumers.
Last month, Drivably announced a new online community that allows consumers to instantly sell their cars to dealers, who bid on the vehicles through an online auction.
Acquisitions aren’t just happening among dealerships. Auctions and other automotive service providers are in the mix, too, with the latest move involving the rarest of vehicles.
On Thursday, Barrett-Jackson Holdings, the parent company of Barrett-Jackson Auction Co., announced the acquisition of the Phoenix-based Collector Car Network, including ClassicCars.com, AutoHunter, The ClassicCars.com Journal and the Future Collector Car Show.
The company said through a news release that the acquisition furthers Barrett-Jackson’s mission to grow the collector car market through strategic alignment of best-in-class brands and world-class customer service.
“Barrett-Jackson Auction Company and ClassicCars.com are two of the most respected companies in the collector car hobby,” Barrett-Jackson chairman and chief executive officer Craig Jackson said in the news release. “Our internationally broadcast live events and their online platforms are unrivaled.
“Working together, we will better serve our booming customer base, as well as attract the next generation of collectors to the hobby,” Jackson continued. “This strategic step has the potential to fuel unparalleled expansion of the collector car market.”
Collector Car Network is a four-time honoree on the Inc. 5000 list of fastest-growing companies and is comprised of four brands, including:
— ClassicCars.com: Five-time Stevie Award winner for Front-Line Customer Service Team of the Year. Attracts more than 4 million visitors each month and supports the largest online network of buyers, sellers, dealers and auction houses.
— ClassicCars.com Journal: Reaches more than 500,000 monthly readers and is recognized as one of America’s most influential online automotive websites.
— AutoHunter.com: Launched in 2020 and offers a simple, convenient online auction site supported by a seasoned team of automotive experts who guide, inform and educate buyers and sellers.
— Future Collector Car Show: Hosts more than 12,000 guests annually and features vehicles that target the next generation of car lovers, as well as the up-and-coming cars of today.
Roger Falcione, president and CEO of Collector Car Network, described the potential impact of this deal involving Barrett-Jackson, which was founded in 1971 and has been on the internet since 1994 to incorporate online auction catalogues, online bidding and live streaming.
“We see this acquisition as an enormous growth engine for the collector car marketplace,” Falcione said. “Our two companies are perfectly aligned to be the leading resource for car collectors worldwide, including the rising generation of collectors who are evolving the market.”
Jackson added, “Roger and his team have built an exceptional organization with an award-winning customer service culture. Like Barrett-Jackson, they have built incredible brand equity over the years.
“Combined with Barrett-Jackson’s customer service record, expertise and world-class marketing efforts, we will make it even easier for everyone to engage in the hobby,” Jackson went on to say.
