I listened to an Automotive News webinar this week called “Navigating Today’s Highly Competitive Dealership Buy-Sell Market.” The presenter, Mark Johnson, president of MD Johnson, Inc. said something that stuck with me as I wrote one of this week’s stories. Said Johnson: “While you may not have a great relationship with the guys in your market, they are likely your best opportunity.”
He was talking about how to land a good acquisition given the tight the supply for dealerships, especially with new, cash-rich investors such as family offices and private equity competing for the same opportunities.
Sometimes, you have a great relationship with the guys (or girls) in your market and that leads to a good acquisition opportunity. That’s the case in the O’Steen family’s acquisition of Pipkin Motors. A former employee alerted the O’Steen’s to the opportunity and partnered with them on the deal.
Another point Johnson made is that the manufacturers aren’t too keen on private equity owning their franchises (though he also said PE is here to stay and will learn to play the game better). That may be a stumbling block to the realization of a plan that is the focus of the other story this week.
Mark Rikess aims to leverage his expertise at dealership training to create a new dealership group. He didn’t give me precise details, but said he is talking to five potential capital partners. Given the nature of his plan, if the manufacturers don’t care for his capital partner that could slow things down. Check out the story for the details and leave some comments letting us know if you think the plan is feasible. Let’s get a conversation going!
We also have the always-popular Transaction News.
Enjoy!
