The pace of consolidation in the retail automotive industry has dramatically increased since the middle of 2020, including more large dealership groups being sold than ever before.  The Presidio Group leads investment banks in automotive-focused strategic transactions of this nature, having exclusively facilitated three of the most notable transactions in auto retail history over the last 12 months.  

Presidio successfully represented Park Place, The Suburban Collection and John Eagle Automotive Group, three of the largest private dealership groups in the U.S.  With combined annual revenues of over $5 billion representing nearly 70 dealership franchises, these iconic sales to Lithia Motors and Asbury Automotive Group mark an expected consolidation trend in the retail automotive industry going forward.    

Deals of this size do not happen overnight. They are riddled with complexities due to the number of rooftops, complex financial reporting structures, franchise composition, and the limited number of buyers that have the wherewithal to execute.  Achieving a successful outcome and closing for these sellers requires a unique skill set, deep industry knowledge, months of planning, and appropriate resources.  Consider The Suburban Collection, which involved 56 dealership franchises, more than 34 rooftops, and over $2.4 billion in revenues.  Then there was the sheer number of manufacturers, with 33 different brands ranging from Ford, GM, Jeep, and Toyota to Mercedes-Benz, BMW, and Porsche.  “Dealing with the moving parts associated such a sophisticated and complex business that also included several other ancillary business units required detailed planning, organization and expertise,” says George Karolis, president of The Presidio Group.  

Assigning a value to such a multi-layered organization is also a sophisticated process, involving both art and science.  There are many qualitative and quantitative considerations, and a tremendous amount of information must be analyzed to present the appropriate financial and operational picture. That includes the difficult but crucial task of reformulating the information in a way that is consistent so both the client and interested buyers understand the valuation. “Presenting a clear and fair valuation as well as identifying the potential operating issues post-closing is the only way to find the right buyer while maximizing the business value,” says Brodie Cobb, CEO of The Presidio Group.   

Achieving that consistency is only half the battle, however. A suitable pool of buyers must then be identified, prioritizing quality over quantity. This is true not just for very large transactions, however.  For a deal of any size, simply advertising that a dealership or group is on the market does the Seller a disservice. Even single store or small dealership group transactions can attract dozens of interested parties who must be winnowed down to the most suitable. For a large transaction such as Park Place– considered the highest-priced retail automotive strategic transaction to date and involving 10 luxury dealerships and two collision centers — there is a very select pool of qualified buyers that are both approvable by these unique OEMs and can afford the price tag. That necessitates a very deep industry Rolodex with a tight filter. “Usually there is only a handful of appropriate and qualified buyers who will offer the best price and closing certainty while meeting the Seller’s cultural and legacy objectives,” says Karolis.    

Gaining multiple manufacturers’ approval for a transaction is time-consuming and sometimes difficult. But when a transaction involves a highly concentrated group of franchises from the same manufacturer, the complexity increases tenfold due to framework agreements, local market share and other factors. The sale of John Eagle’s 11 high volume import dealerships to Lithia, with seven Honda franchises and one Acura franchise concentrated in Texas, was uniquely challenging. Only a few select buyers would be able to afford such an acquisition and then be able to successfully navigate the OEM approval process.   

There has been a lot of talk in recent years about new types of buyers interested in the automotive retail space, such as family offices and private equity. While these buyers may have the financial means to acquire a Park Place or Suburban Collection, there are other considerations. Large strategic buyers – that is, dealership groups – have an edge due to their knowledge of the industry and their existing relationships with automotive manufacturers. They are able to quickly grasp the basis for a valuation and move forward, bringing more certainty of a successful closing. Other potential buyers may require additional time to evaluate the deal, can overanalyze some aspects, and face more risk in gaining manufacturer approval. All of that adds time, cost, and uncertainty to the transaction.  

Psychology also plays an important role in successfully completing very large transactions. Presidio understands that the Seller is emotionally invested in his or her business and addresses that appropriately. Understanding the Buyer’s psychology is equally important given the size of the investment and the potential risks. “We do not ignore these challenges and opportunities,” says Cobb. “We address them in a process that satisfies both parties and their constituencies.”  

Successfully executing any size transaction involves many steps, from understanding the potential market size to future growth opportunities and demographic and geographic statistics. But with very large deals the scale is different. They involve more complicated financial statements, ancillary businesses, intercompany transactions, and a large number of dealerships, among other factors. And when it comes to consummating a transaction, other considerations including anti-trust, local and regional permitting, and legal and structural complexities come into play.   

The Presidio Group, whose executives include both former top executives from the public dealership groups and investment bankers, brings a uniquely qualified skill set to these transactions as well as the most experience executing them. Our deep relationships allow our clients to achieve outcomes that meet their strategic and financial goals. Whether the transaction is one of the largest in retail automotive history or a single franchise, Presidio provides our clients assurance they are obtaining the best possible valuation for a business they have spent decades building, and that their legacies will be protected.  


Brodie Cobb
(415) 449-2525

George Karolis
(678) 831-5520

The Presidio Group provides M&A advisory services through its wholly-owned investment bank, Presidio Merchant Partners LLC, Member FINRA and SIPC