Kerrigan said buyer interest, including some from private investors seeking to enter auto retail, is growing as dealerships have recovered from the severe and sudden financial losses they faced early in the pandemic. Buy-sell experts said many dealerships posted record months for profits in the summer.
“I see buyers really looking at this period as a moment in time to truly transform their business and make significant acquisitions to capitalize on the benefits of economies of scale,” Kerrigan said.
Pinnacle Mergers & Acquisitions in Frisco, Texas, saw closings held up because of COVID-19 and automaker approval delays until June 1, “when things broke loose” and pre-COVID deals began to close, CEO Bill Scrivner said.
Of Pinnacle’s 25 deals under contract pre-COVID, three closed before March 15, Scrivner said, and 15 closed between June 1 and mid-September. He expects the rest to close in the next 60 days.
Scrivner said he has seen more sellers coming to market than in the past few years, convinced that now is the time to exit amid the pandemic and uncertainty about the future of auto retailing.
But there are buyers for the stores, and Scrivner said his 2020 deal count could be higher than last year.
“I’ve got 10 more offers on the table right now that would take it to 35,” he said.