Upload
erin-kerrigan
View
333
Download
0
Embed Size (px)
Citation preview
Dealerships Are Far Too Valuable To Be Sold Any Other Way
Lots of Activity in the Buy/Sell Market
1899
1904
1909
1914
1919
1924
1929
1934
1939
1944
1949
1954
1959
1964
1969
1974
1979
1984
1989
1994
1999
2004
2009
2014
0
100
200
300
400
500
600
700
800
Source: SEC Filings
709.272008.11.20 – 2015.06.05Market Takes Off
968% Rise (Nov. 2008-June 2015)
The Kerrigan Auto Retail Index – Hit a Historic High in June 2015Text Speaker Questions to: (805) 330-3311
Dec 99
Mar 04
May 08Ju
l 12
Sep 16
Nov 20
Jan 25
Mar 29
May 33Ju
l 37
Sep 41
Nov 45
Jan 50
Mar 54
May 58Ju
l 62
Sep 66
Nov 70
Jan 75
Mar 79
May 83Ju
l 87
Sep 91
Nov 95
Jan 00
Mar 04
May 08Ju
l 12
350400450500550600650700750
Source: SEC Filings
42% Decrease (June 2015-Jan. 2016)
408.812015.06.05 – 2016.01.28
The Kerrigan Auto Retail Index – Declined 42% Coming into 2016Text Speaker Questions to: (805) 330-3311
2010 2011 2012 2013 2014 2015 2016*
$211
$504 $502$659
$1,449
$832$572
Source: SEC Filings
Public Dealership Group Acquisition Spending in USSince 2010
31%
*2016 represents acquisitions for first 9 months
Text Speaker Questions to: (805) 330-3311
The Publics Acquisition Spending Declines in 2016
Public’s Capital Allocation through Q3 2016
Stock Buyback$1,143
Dividends$110
Capex$799
Non-Dealership Acquisition
$521
Foreign Acquisi-tion
$163
Domestic Acquisi-tion
$578
Publics Allocate Their Capital Elsewhere
“There is no question that our move into the Premier Truck Freightliner retail business was driven because of some of the multiples and goodwill requirements we had on the auto side.”
Roger Penske, Chairman and CEO Penske Automotive3rd Quarter Earnings Call
Source: SEC Filings
2013 2014 2015 2016
9.2x 9.1x
7.6x6.7x
Public’s Estimated Blue Sky Multiples “This is an interesting industry. If we look back over time, there are times when the private dealers are valued at premiums well above where the publics trade. And there are times where the exact opposite happens.”
Craig Monaghan President, CEOAsbury Automotive2nd Quarter Earnings Call
Public Estimated Blue Sky Multiples Down Since 2014
6.2x
Source: Kerrigan Advisors Analysis
US Dealership Market Share
14,930 dealerships are ownedBy small groups and individuals
5.2%
82.9%
0.118166666666667
Non-Public DealershipsPublic Dealership Groups
Auto Retail – Still a Highly Fragmented Market
Source: The Banks Report
Number of Transactions2013 to 2016
2013 2014 2015 2016*
114 Transactions
206 Transactions
241 Transactions 229
Transactions+ 17%
*2016 represents first 9 months of acquisitions annualized
+ 81%
- 5%
101% Increase
Text Speaker Questions to: (805) 330-3311
Number of Transactions – Still Near Record
2014 2015 2016 Annualized
50 51
65
Multi-Dealership Transactions
Multi-Dealership Transactions Increased in 2016
27%
Increase
Source: The Banks Report
Text Speaker Questions to: (805) 330-3311
2009 2010 2011 2012 2013 2014 2015
$594 $680
$816
$968 $1,000 $1,085
$1,230
Average Revenue of Top 119 Private Dealership Groups(in millions)
107% Increase
Source: Automotive News
Private Dealership Groups Significantly Increase in SizeText Speaker Questions to: (805) 330-3311
Domestic51%
Import Luxury19%
Import Non-Luxury29%
Buy/Sell Franchise Transaction Market Share2016
Domestic35%
Import Luxury22%
Import Non-Luxury43%
2015
Domestic Franchises in High Demand in 2016Text Speaker Questions to: (805) 330-3311
Source: The Banks Report and Kerrigan Advisors Research
4 and Under 4 - 5 5 - 6 6 - 7 7 - Priceless
Average Kerrigan AdvisorsBlue Sky Multiple Ranges
Franchise Preferences Influenced by ROI, Capital Requirements and Risk
More Operational Risk
Higher ROI
LowerROI
More Capital Risk
Luck Running Out?
The Auto Retail Elixir
Source: NADA
2013 2014 2015 2016 YTD0%
5%
10%
15%
3.9%
8.3%
New Vehicles Sales Fixed Operations
Fixed Operations in Growth ModeText Speaker Questions to: (805) 330-3311
New Vehicle and Fixed Operations Sales Growth for the Average Dealership
New Vehicle Used Vehicle Fixed Operations
6% 12%
45%
Source: NADA
Average Dealership Gross Profit Margin by Department
2.1x
7.5x
Fixed Operations and Used Vehicles Drive Dealership Profits
“Parts and service was the highlight of the quarter. We were able to offset the declines in our new and used business with strong growth in parts and service.”
David HultCFOAsbury Automotive3rd Quarter Earnings Call
Source: SEC Filings, NADA
SG&A as a Percentage of Gross Profit YTD 2016
Average Public Dealership
Average Private Dealership
73%
86%
13% Delta
Economies of Scale and Scope Support Continued ConsolidationText Speaker Questions to: (805) 330-3311
Source: SEC Filings
12/31
/2015350
400
450
500
550
600
544.452016.01.28 – 2016.12.30
27% Rise
Since Electi
on
The Kerrigan Auto Retail Index – Experiencing the Trump Bump Text Speaker Questions to: (805) 330-3311
TEXT QUESTIONS TO (805) 330-3311
Sold ToGee Automotive
Sold ToLithia Motors
Sold ToAMSI
Sold ToKDW Automotive
Sold ToMcManes Auto Group
MERCEDES-BENZ OF EDMONTON
WESTSold To
Kendall Auto GroupSold To
AutoNationSold To
Car ProsSold To
Victory Automotive
Recent Transactions
Securities offered through Bridge Capital Associates, Inc. Member FINRA, SIPC