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Some respected and experienced auto dealers are looking at fluctuating market conditions, supply chain nightmares and market disruptions by straight-to-consumer sales models, and saying, “I think now is a good time to cash out and enjoy my retirement.”
And it’s a good time to do so, says Peter Heasty, President of Acquisitions at Baker Tilly WM. Despite everything happening in the market, profits are at record levels, so it’s currently a sellers’ market. There is a lot of opportunity for owners to cash out and reap the benefits of many years dedicated to selling cars and building a business in their communities.
“If you’re going to sell your car dealership, and you don’t want to do it alone because you’re not experienced, or you’re not one of the big folks that has a whole corporate structure, there’s one of two possibilities that you look at,” said Heasty, in a conversation with Canadian auto dealer. “Maybe your accountants are some of the big four, and they’ve got their mergers and acquisitions division, and you talk to them. But, what happens when you deal with a generalist in mergers and acquisitions is they’re not at street level, and they don’t necessarily know the talk and walk the walk and can’t necessarily liaise with principles on both sides,” he says.
Heasty is an industry leader in facilitating automobile dealership transactions. With more than three decades in the auto dealership business, he also has a history of delivering for clients as part of the Baker Tilly Canada network. Through his full-service one-stop shop, Heasty provides clients with a unique understanding of negotiation and asset valuation specific to the auto dealership industry.
“As a CPA and a dealership owner, Peter brings a complex understanding to both sides of dealership transactions,” said Baker Tilly WM managing partner Paul Websdale. “Known for offering the full spectrum of what’s needed in every situation, he gives clients his full attention, sees deals through from beginning to end and ensures they always get done.”
Heasty says that because of the record profits still being made, there are many dealership groups that have a lot of cash on hand, and would like to deploy it.
“A lot of dealers made a lot of money through the pandemic. Part of it was learning how to fine tune business expenses. Other reasons were related to product shortages, so gross profits were higher per unit, and this led to record profits which were enjoyed by a lot of the big groups. They have a lot of money, and they’re ready to cut cheques. So if you’re somebody who doesn’t want to play the game anymore, I’m the person you should be talking to. Now’s the perfect time.”
Heasty’s boutique M&A service benefits greatly from the accounting backing of Baker Tilly WM. “Really, our unique selling proposition is the fact that we offer that boutique service to our clients,” said David Keene, Baker Tilly’s Marketing Manager. “We work with big clients, mid-size and small clients, but it’s that relationship building that the partners invest their time and energy into. And each of the partners will have a specialization. And in this respect, Peter is a really key guy to have because he’s an auto guy, his background is in the auto industry, and that’s what he does.”
Goodwill prices are still at a premium, says Heasty. And understanding the value that may be hidden in a dealership’s accounting numbers can greatly maximize the price a seller can get, if you know where to look. As an example, “A dealer might be doing $1,500 a car in the business office, and the competition’s doing $2,800 a car, and the dealer is leaving $ 1,300 a car times, 1,000 cars on the table. If you do the numbers on that, instead of making a million dollars a year, he probably, without too much difficulty, could be making $2 million a year. And that triggers how we do the transaction, and maximize the opportunity for the seller.”
“Truly personalized service is what you get with Peter Heasty,” said Heasty. “You get me the whole way. You don’t get pushed off to an analyst or the VP of Western Canada, or someone else. If you’ve got a little store in a rural community that you’ve built for 40 years and now you want to maximize profit for your retirement, or if you’re a guy that spent the last 35 years building a five dealership platform and you’re making $7 million a year, and you’d like to see if there’s a 50 or 60 million cheque at the end of that. Big or small you get me working for you from beginning to end”.
To find out more and connect with Peter click here: Peter Heasty | Baker Tilly Canada | Chartered Professional Accountants
