March 6, 2018 — Despite industry perception that dealership consolidation is on the rise, buy-sell activity of U.S.-based stores declined in 2017 for the second consecutive year, based on data compiled by The Banks Report.
Even with the downward trend the last two years, the buy-sell market has been vibrant since 2013 as the industry came out of the recession. Between January 2013 and December 2017, approximately 9.1% of the 18,200 U.S.-based dealerships were involved in buy-sell transactions, according to The Banks Report’s fifth annual report on dealership buy-sell activity. TBR’s research shows there were 995 transactions involving 1,669 rooftops over the five-year span.
This report will recap 2017 with an analysis of the numbers, a discussion of the notable deals of the year and an analysis of the buy-sell activity of the public dealer groups. The report will conclude with TBR’s projection for 2018.
The annual buy-sell reports are available to premium subscribers.
The 2017 Report can be accessed Here: TBR 2017 Dealership Buy-Sell Report
Each report includes:
- A spreadsheet listing the year’s transactions. (TBR’s data, which is the most comprehensive in the industry, goes back to January 2013.)
- A breakdown of the data by brand, segment and private versus public transactions.
- Recap and analysis of the year’s notable transactions.
- Analysis of the year’s activity and any trends that may be developing.
- For example, in early 2014, TBR was the first to report on the manufacturer’s growing use of the right of first refusal to manage their retail networks.
- TBR also was the first to report on the entrance of family offices and other private equity interests as investors in dealerships.
- TBR also was the first to report on the creation of the RFJ Auto Partners by Rick Ford and private equity firm the Jordan Company in 2014 along with the entrance of GPB Capital (which now has approximately 60 dealerships under the Capstone Automotive brand)
- Projections for the coming year. In last year’s report, The Banks Report accurately predicted buy-sell activity in 2017 would be consistent with previous years.
- (Note: TBR does not publish financial details of dealership buy-sell transactions because most are kept private.)
- TBR does not provide perspective regarding blue sky values or brand multiples. Kerrigan Advisors and Haig Partners (buy-sell advisory and brokerage firms) each publish quarterly reports (which rely on TBR’s buy-sell data) that provide helpful analysis of industry blue sky trends. TBR does not have access to financial data from each transaction. Also, it is our perspective that each buy-sell is its own book, driven by numerous factors that extend beyond a brand’s perceived strength or lack thereof.