Andy Church, Chief Operating Officer, USA
Andy Church, Chief Operating Officer, USA
Maxime Theoret, CFO
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The team from Dealer Solutions Mergers and Aquisitions were down at NADA in full force, talking to dealers, bankers, suppliers and others to help get a pulse of the industry and see whether Canadian or American dealers are in a buying or selling mood.
“It was a great opportunity to network and be visible,” said Maxime Theoret, CFO at Dealer Solutions.
Theoret said Canada has been very active for Mergers and Acquisition; the company closed 40 transactions last year — and they expect to do 50-60 this year. “It will be a record year,” said Theoret.
Maxime Theoret, CFO
One of the main factors driving sales is an aging dealer body with a second and third generation who does not want to get into the business. “So, one of the options is to sell the business, which is being considered more and more by a lot of owners right now,” said Theoret.
He said after years of active buying, some dealer groups are now selling some of the stores that don’t fit their operations. “Perhaps they are too far from the other operations, or the brand is no longer a fit with their broader strategy,” he said.
For buyers, they are always evaluating the talent in the dealership, and at the top of that list is a good general manager. There’s always a concern if a really engaged dealer principal withdraws from the operations, because their ties to the community and customers are often a big factor in boosting sales and performance, according to Theoret.
“One of the reasons we come to NADA is to understand from those similar professional service areas what’s happening in their world. A large percentage of the transactions on the U.S. side still happens without someone like ourselves who’s actually acting as an advocate,” said Andy Church, Chief Operating Officer, USA, Dealer Solutions.
He said in some cases an accountant or lawyer tries to sell the store. “Dealers really do themselves a disservice,” said Church. “That person may never have done a dealership transaction. Our value proposition is to say to dealers ‘my real passion in the industry for the last 20 years is helping dealers understand the value of their asset and then capitalize on that value,” said Church.
Church said they often attend industry events like the J.D. Power event brand assessment review to understand the dealer perspective on a brand’s quality, appeal, and sales volumes. “That helps us determine what everybody wants to know in our industry: what’s my multiple? What’s my store worth? It’s complex,” said Church.
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