I read this week of the problems AutoCanada is having with its March 2018 acquisition of the nine-dealership Grossigner Auto Group. It seems that the acquisition cost was substantially higher than AutoCanada first anticipated. Also, the stores had operational issues that hadn’t been revealed during the acquisition. An analyst attributed the problems to a lack of due diligence. The outcome of that deal highlights the importance of working with a buy sell firm that does a deep dive into an acquisition’s operations before the deal is done.
The rationale behind an acquisition is just as important as whom you work with on the deal. This week, Joe Aboyoun returns to ABSR with a look at strategic acquisitions or, sometimes, divestitures. From diversifying a purely domestic franchise mix to investing in an OEMs channel strategy, there are various strategies to consider. Read more in his column.
Every dealership acquisition is at its roots a real estate deal. Making sure you are obtaining a good real estate valuation depends much on using the proper methods and professionals experienced in what they are doing. Cushman & Wakefield in this issue walk you through the different real estate valuation methods. Its important to have a valuation that carries credibility with a buyer or a lender.
And of course we have Transaction News.