Elm Creek Autogroup recently acquired the Bounds Autoplex in Livingston, Tex. It was the first multi-franchise acquisition for Elm Creek, based in Plano, Tex. But it may not be the last.
“Our goal is ten stores over a three year period,” Thomas Bies, president and co-founder of Elm Creek Autogroup LLC tells Automotive Buy Sell Report.
Bounds Autoplex – whose name has been changed to Premier Autoplex — includes Buick, Chevrolet, and GMC and Jeep, Dodge, and Ram franchises under two rooftops. Elm Creek worked with Performance Brokerage on the acquisition.
Both stores were performing at only 60 percent of the manufacturer’s metric, says Bies. They didn’t have much of an internet presence, service wasn’t that great, and they weren’t selling a lot of used cars, he says. Nonetheless, “We still had to pay the multiples,” says Bies.
Thomas Bies, President and co-founder of Elm Creek Autogroup
He sees a lot of potential for growth, however. It will just require what Bies calls “a little basic car business 101 type stuff.” That includes building a better web site, getting the right inventory, and installing a CRM system. The former owners were still using paper logs, says Bies.
The facilities are all image compliant, which made the deal more attractive. Now, “it’s just more technology and people mainly,” he says. “First and foremost you have to get the right people.”
These stores are the first domestic franchise acquisitions for Elm Creek, which was founded in March of 2015. Bounds is the first multi-franchise acquisition. The name Elm Creek is taken from Elm Creek Investments, which is owned by Bies’ partner Karl Williams.
Williams works in aerospace and is a car enthusiast. Indeed, he is a 2016 Ferrari Challenge driver sponsored by Beverly Hills Ferrari. Williams visits all the dealerships, but isn’t closely involved in day-to-day operations, says Bies.
Elm Creek’s first acquisition, in March of 2015, was a Mazda dealership in Kansas City, Mo. The store’s owner approached Bies and Williams, and the store fit their criteria. They look for good brands in smaller markets, says Bies.
They also like dealerships that are close to Plano by car or plane. Plano is just north of Dallas and there are seven or eight flights a day on Southwest between Dallas and Kansas City.
It didn’t hurt that Bies fell in love with Kansas City. “The food was great, the neighborhood was great,” he says.
Elm Creek paid less than $1 million for the franchise and just under $3 million for the real estate. It was the last place Mazda store in the region, and lacked the right processes and people, says Bies.
Premier Mazda, as the dealership is now known, is now the number one Mazda store in Kansas City, Bies is on the Mazda dealer council, and Elm Creek is in the process of buying a second Mazda store, he says.
Elm Creek Autogroup’s second acquisition, in July of 2015, was a Kia dealership in Lufkin, Tex. They might have “paid up a little bit” for the Kia store, says Bies, but the brand is doing really well and is a good fit for the demographics of the Lufkin market, he says. The newly-acquired Bounds stores are in the same area.
A wealth of dealership experience
Bies, 49, has plenty of dealership management experience. He started his dealership career in 1993 at Frank Parra Autoplex in Irving, Tex. Bies was there for 10 years, then Parra sold the stores to Sonic Auto Group.
“It was a great place to work run by a great family,” says Bies. “Had they not sold to Sonic, I would probably still be there.”
His next stop, was with Carl Sewell’s auto group. Getting a chance to work with Sewell, who literally wrote the book Customers for Life was great, says Bies, but there wasn’t a lot of upward mobility in the organization.
After four years with Sewell, Bies went to work for Clay Cooley Automotive in Dallas in 2007 as variable operations manager. “I got a PhD in used car operations,” he says.
Next stops were as general sales manager for Van Tuyl Group’s Infiniti and Cadillac stores in Plano, then as managing partner in an ill-fated acquisition of the Frank Parra stores from Sonic. “That was a complete disaster,” says Bies.
He was running Massey Cadillac, a Sonic dealership in the Dallas-Fort Worth area, when the idea for the Elm Creek Autogroup was born over dinner with his friend Karl Williams.
They have two acquisitions in progress right now, says Bies — the additional Mazda store and a deal he declined to give details on. When those are complete, he and Williams will be over half way to their goal of ten stores. But they aren’t slowing down.
“We are looking for a Ford store,” says Bies. “We could probably squeeze one more [acquisition] in before year’s end.”
One Comment
Mitch
We were given a great deal on two Dodge 1500’s, after buying a 2500 7 months ago. The prices were by far unbeatable anywhere else we looked. Great job. Interest rates were good, unber 6 percent on 2 of them and 3 on the third one. They done what they said they were going to do. If you say you are going to do something, do it.
Sales staff, I would recommend dealing with the general manager, he cut through the red tape and battle.
Body shop done a great job, very helpful in all my dealings with them with prior trucks.
Service, never had any dealings with them.
Parts, great group of people. Always helpful, even if the part you are looking for isn’t what you think it is lol. They were very patient.
Service after the sale?