The market for dealerships is really steaming right now. We all know that. Blue Sky values are, well, sky high. If you are a buyer, you might be tempted to rush through a buy sell agreement because you fear the loss of a good opportunity. Don’t.
The numbers that go into calculating those Blue Sky values need to be checked carefully. That means more than doing a typical due diligence, i.e. a due diligence that is not tailored to a dealership operation. In this issue, Ira Silver, a principle at MBAF, lays out the special areas that a thorough dealership due diligence should cover, and the potential cost of not doing so.
Also in this issue, I talk with K.C. Heidler, president of Tom’s Truck Center. I met K.C. at the Orange County Auto Dealers Association lunch I attended a few weeks ago. Tom’s includes both truck and car dealerships, and talking with K.C. about his business model I realized it was information that my readers would be interested in having. Here’s a clue about what’s different at Tom’s: It has a warehouse stocked with eight million new and used parts.
And of course we have Transaction News.