By Alysha Webb, Editor & Publisher
Mark McLarty is realizing his vision for McLarty Automotive Group. His recent acquisition of the majority of the Joe Machens Dealerships franchises adds to his growing dealership footprint in his desired area in the central United States.
He will keep the existing management at the acquired dealerships in place, also part of his vision of staying connected to the communities where his dealerships are located.
And, McLarty has found investors that will allow him to own and operate the dealerships for the long-term.
“Three families have invested in McLarty Automotive Group to support the group for decades so we can focus on the business instead of capital,” McLarty told Automotive Buy Sell Report.
The Hunt, LaFrance and Soros families have joined to invest in McLarty Automotive Group for the long-term. This provides McLarty Automotive Group with the ability to evolve along the lines demanded of the cyclical and increasingly capital intensive auto retail industry.
“All of us as shareholders are committed for the long haul,” said McLarty. “We have no time horizon [and] no quarterly earnings reports. This is generational capital that comports with the stability desired by OEM’s, employees and customers.”
Long-term connections
His connections with all three families go way back. The Soros family was one of the original investors in China Grand Auto Group, McLarty’s first venture into China, in 2004. “We go back as partners now more than a decade and they’ve been extraordinarily supportive throughout that time,” said McLarty of Soros.
The J.B. Hunt family owns one of the largest trucking companies in the United States. McLarty’s grandfather owned a Ford dealership in Arkansas that leased heavy-duty trucks to the Hunt’s company in the early 1970s. “It is a three-generation relationship,” said McLarty, “and a family that I still remember my grandparents extolling as epitomizing hard work, business ethics and perseverance.”
The LaFrance family, also Arkansas-based, owned USA Drug which was sold to Walgreen’s in 2012. Stephen and Jason, the sons of USA Drug founder Stephen Dale LaFrance Sr., who passed away in 2013, are original investors in McLarty Automotive Group. “The LaFrance’s are wonderful partners and know this region inside and out as they grew their business here over decades,” said McLarty.
“We have all worked together in different ways over the years,” he said. “To have those histories connect and come together with McLarty Automotive Group is great for the business, the communities we serve and our growing team. This is how ‘car people’ and capital come together to create jobs and opportunities.”
Stability can be a scarce commodity in today’s capital-intensive dealership world. Growing facility-related and equipment demands from manufacturers and rising administrative and IT expenses have made it harder and harder for individual dealers to remain in the business and grow, said McLarty.
Ready access to substantial, long-term capital also helps attract and retain high-quality management while also giving them the opportunity for fast career advancement, another part of McLarty’s vision. For example, Stephen Nagel, General Manager of the Honda store McLarty acquired in Columbia, Mo. in March, previously worked at AutoNation for 17 years.
There, he ran some of the company’s leading dealerships in the Mid-South before joining McLarty Automotive Group as a partner in the Honda dealership. Nagel has risen now to take the reins of the largest Ford Lincoln dealership in Missouri, leaving room for more managers to advance at the Honda store.
McLarty wants to provide a path for proven General Managers to become partners. And because of McLarty Auto Group’s long-term outlook managers such as Nagel have a reliable partner to help carry the risk of investing in dealerships.
“For many of the most capable dealers, buying a dealership alone requires putting their family’s finances at risk,” said McLarty. “We seek to connect the best managers with the resources they need to reach their full potential but do so without placing their families in jeopardy.”
Early-morning meetings
McLarty kept most of the original staff when he acquired the Honda store in Columbia and quickly hired more. That led, in a round-about way, to his acquisition of the Joe Machens Dealerships in Columbia and Jefferson City.
Gary Drewing, the previous owner of Joe Machens, called McLarty because he liked the way McLarty had kept people on board after the Honda acquisition. Drewing asked McLarty to come by his office to talk at 6am one morning. After four more 6am meetings, the deal was struck.
“Like many dealers, I think Gary and Rusty saw the logic in selling but were concerned about the team and felt a strong loyalty to their well-being,’” said McLarty. “They seemed to recognize my family, as a fourth-generation in the industry, was cut from the same cloth and was not going to change a winning team.’”
The acquisition did not include Joe Machens BMW or Joe Machens Mercedes-Benz. Rusty Drewing, son of Gary, will continue to operate those stores but the name will change to BMW of Columbia and Mercedes-Benz of Columbia.
The entire deal has a sanguine feel about it.
“There was a very harmonious buyer seller relationship between Gary, Rusty, and me,” said McLarty. “Both of them are wonderful people and great car men. Top shelf in every way; I have the utmost respect for what they’ve done and how they’ve done it.”
That harmony extended to Dave Machens, son of Joe Machens. McLarty journeyed to Kansas City to meet with Dave Machens to make sure he was okay with the transaction. “Dave is an unusually thoughtful, down-to-earth person”, said McLarty. His willingness to provide continuity with the Machens name meant so much to the team and the community and to me. It’s a great heritage and one all of us will work hard to uphold.”
McLarty has his eye on more dealerships in the central United States. He also continues to own dealerships in Brazil and China and a distributor in Mexico. One of his China investments has come full circle.
When Yanjun Automotive, a dealership group in China owned by McLarty, merged with Baoxin Auto Group in 2012, McLarty held on to his shares. In September, Baoxin was acquired by China Grand Auto, McLarty’s original dealership investment in China which he led as CEO. So, McLarty is part owner of China Grand Auto again. “I gave up a long time ago on thinking I have any insight whatsoever into what the future holds,” McLarty said with a laugh.
