FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--The pace of auto dealership buy-sell transactions continued accelerating at double-digit rates in 2013, with public retailers committing more than $1 billion to acquisitions for the first time since 2006. The value of public dealerships’ acquisitions climbed 16.5 percent from 2012 levels while the number of private transactions rose 14 percent.
The buy-sell market is reviewed in The Blue Sky Report from Haig Partners LLC, a newly-formed firm that advises owners on selling their dealerships. Its founder, Alan Haig, led the automotive retail practice for the investment banking arm of The Presidio Group LLC, was head of AutoNation’s corporate development group, and is considered a leading authority on dealership valuations.
“Auto dealers are enjoying record profits, new vehicle sales are strong and rising, and the economy is improving. Those factors are driving valuations to all-time highs. It’s an ideal environment for sellers,” said Haig. “But the sellers’ advantageous position isn’t deterring buyers. It’s a low-yield world with few attractive alternatives for investment capital. Even with high purchase prices, dealership acquisition returns are very compelling.”
The buy-sell market will remain robust, according to Haig, for several reasons:
- Private buyers are very active and interested in both single-point stores and larger groups.
- With one exception, every public retailer has publicly expressed a desire to grow through meaningful acquisitions.
- Many dealership groups have the capacity to make commitments of $100 million or more, with several capable of $500 million deals.
- The range of attractive brands is broad: the ten largest dealer groups acquired 16 different franchises in 2013.
Haig Partners closely tracks valuation trends for individual franchises. The firm is raising the multiples for Jaguar/Land Rover and Ford, and lowering those for BMW, Hyundai, and VW. The Blue Sky Report for Year End 2013 (including the updated Blue Sky Multiples) is available here.
About the firm. Haig Partners LLC focuses on higher value auto and truck dealerships and dealership groups where it can add substantial value through expert advice and comprehensive services. The firm’s principals combine the financial and marketing skills developed as investment bankers with their dealership experience at AutoNation and Asbury. They have an unmatched record of success, having closed more than 150 dealership buy-sells with a value of nearly $3 billion. For more information, visit www.haigpartners.com.