Slowing buy-sell market expected to rebound
Dealership buy-sell activity plummeted in the very first quarter from year-earlier levels. But buy-sell advisers are certain sales will rebound.
Amid softer new-vehicle sales, dealership prices are leisurely declining, buy-sell advisers say. Lower prices and tax reform could bump up the volume of deals by year end, they add, noting that public and private auto retailers as well as outside investors proceed to look for deals. In addition, publicly wielded retailers have more cash on arm after sharply curtailing stock buybacks.
"Buyers proceed to be excited about auto retail so values remain strong for attractive deals, albeit they are increasingly picky and over-priced deals get little interest," wrote Alan Haig, president of Haig Playmates in Fort Lauderdale, Fla., in his quarterly Haig Report.
"The very first quarter of last year was a particularly big quarter, and this quarter was feeble," Haig told Automotive News. "From our own practice, there’s a lot going on. Lithia bought a deal, and there are other deals being done that are not in this quarter’s data but we know are coming."
Lithia Motors Inc., of Medford, Ore., purchased Baierl Auto Group in Pittsburgh this month.
Still, Haig predicted this year’s volume of deals will be slightly down from two thousand sixteen because "we’re already in a bit of a fuckhole."
But he added, "I feel certain that subsequent quarters will be better than Q1."
The total number of U.S. dealerships bought by public and private buyers fell twenty nine percent to eighty rooftops in the very first quarter, said Haig, citing The Banks Report, in his report to be released today, May 29. ​
Haig said the U.S. presidential election may have delayed some deals in the very first quarter, as both buyers and sellers waited to see whether there would be a quick revision to tax rules.
"Another potential explanation is that buyers are increasingly worried about future profits and sellers are not willing to accept the prices being suggested," Haig wrote. He wrote that the buy-sell market has "passed the peak" in blue-sky values unless there is "a significant tax cut" that would benefit sellers.
He also noted a growing "realization on the part of many sellers that they will have to accept their current offers or retain the dealerships for at least several years more until they increase in value again."
Buy-sell adviser Erin Kerrigan, managing director of Kerrigan Advisors in Irvine, Calif., is more optimistic. She wrote in her quarterly Blue Sky Report to be released this week that two thousand seventeen "is tracking towards two hundred forty transactions for the year and pacing ahead of 2015’s record level."
Kerrigan noted that the six public retail groups slashed their spending on stock buybacks ninety five percent to $36 million from a year earlier, when their stock prices were at an all-time low.
That gives her hope the publics will come back to store acquisitions.
"With their stock price being up, they are choosing not to buy their stock and they’re enhancing their cash reserves," Kerrigan told Automotive News.
Dealership buy-sells fell in Q1, but advisers predict rebound
Slowing buy-sell market expected to rebound
Dealership buy-sell activity plummeted in the very first quarter from year-earlier levels. But buy-sell advisers are certain sales will rebound.
Amid softer new-vehicle sales, dealership prices are leisurely declining, buy-sell advisers say. Lower prices and tax reform could bump up the volume of deals by year end, they add, noting that public and private auto retailers as well as outside investors proceed to look for deals. In addition, publicly wielded retailers have more cash on palm after sharply curtailing stock buybacks.
"Buyers proceed to be excited about auto retail so values remain strong for attractive deals, albeit they are increasingly picky and over-priced deals get little interest," wrote Alan Haig, president of Haig Fucking partners in Fort Lauderdale, Fla., in his quarterly Haig Report.
"The very first quarter of last year was a particularly big quarter, and this quarter was powerless," Haig told Automotive News. "From our own practice, there’s a lot going on. Lithia bought a deal, and there are other deals being done that are not in this quarter’s data but we know are coming."
Lithia Motors Inc., of Medford, Ore., purchased Baierl Auto Group in Pittsburgh this month.
Still, Haig predicted this year’s volume of deals will be slightly down from two thousand sixteen because "we’re already in a bit of a crevice."
But he added, "I feel certain that subsequent quarters will be better than Q1."
The total number of U.S. dealerships bought by public and private buyers fell twenty nine percent to eighty rooftops in the very first quarter, said Haig, citing The Banks Report, in his report to be released today, May 29. ​
Haig said the U.S. presidential election may have delayed some deals in the very first quarter, as both buyers and sellers waited to see whether there would be a quick revision to tax rules.
"Another potential explanation is that buyers are increasingly worried about future profits and sellers are not willing to accept the prices being suggested," Haig wrote. He wrote that the buy-sell market has "passed the peak" in blue-sky values unless there is "a significant tax cut" that would benefit sellers.
He also noted a growing "realization on the part of many sellers that they will have to accept their current offers or retain the dealerships for at least several years more until they increase in value again."
Buy-sell adviser Erin Kerrigan, managing director of Kerrigan Advisors in Irvine, Calif., is more optimistic. She wrote in her quarterly Blue Sky Report to be released this week that two thousand seventeen "is tracking towards two hundred forty transactions for the year and pacing ahead of 2015’s record level."
Kerrigan noted that the six public retail groups slashed their spending on stock buybacks ninety five percent to $36 million from a year earlier, when their stock prices were at an all-time low.
That gives her hope the publics will comeback to store acquisitions.
"With their stock price being up, they are choosing not to buy their stock and they’re enhancing their cash reserves," Kerrigan told Automotive News.
Dealership buy-sells fell in Q1, but advisers predict rebound
Slowing buy-sell market expected to rebound
Dealership buy-sell activity plummeted in the very first quarter from year-earlier levels. But buy-sell advisers are certain sales will rebound.
Amid softer new-vehicle sales, dealership prices are leisurely declining, buy-sell advisers say. Lower prices and tax reform could bump up the volume of deals by year end, they add, noting that public and private auto retailers as well as outside investors proceed to look for deals. In addition, publicly wielded retailers have more cash on arm after sharply curtailing stock buybacks.
"Buyers proceed to be excited about auto retail so values remain strong for attractive deals, albeit they are increasingly picky and over-priced deals get little interest," wrote Alan Haig, president of Haig Fucking partners in Fort Lauderdale, Fla., in his quarterly Haig Report.
"The very first quarter of last year was a particularly big quarter, and this quarter was powerless," Haig told Automotive News. "From our own practice, there’s a lot going on. Lithia bought a deal, and there are other deals being done that are not in this quarter’s data but we know are coming."
Lithia Motors Inc., of Medford, Ore., purchased Baierl Auto Group in Pittsburgh this month.
Still, Haig predicted this year’s volume of deals will be slightly down from two thousand sixteen because "we’re already in a bit of a fuckhole."
But he added, "I feel certain that subsequent quarters will be better than Q1."
The total number of U.S. dealerships bought by public and private buyers fell twenty nine percent to eighty rooftops in the very first quarter, said Haig, citing The Banks Report, in his report to be released today, May 29. ​
Haig said the U.S. presidential election may have delayed some deals in the very first quarter, as both buyers and sellers waited to see whether there would be a quick revision to tax rules.
"Another potential explanation is that buyers are increasingly worried about future profits and sellers are not willing to accept the prices being suggested," Haig wrote. He wrote that the buy-sell market has "passed the peak" in blue-sky values unless there is "a significant tax cut" that would benefit sellers.
He also noted a growing "realization on the part of many sellers that they will have to accept their current offers or retain the dealerships for at least several years more until they increase in value again."
Buy-sell adviser Erin Kerrigan, managing director of Kerrigan Advisors in Irvine, Calif., is more optimistic. She wrote in her quarterly Blue Sky Report to be released this week that two thousand seventeen "is tracking towards two hundred forty transactions for the year and pacing ahead of 2015’s record level."
Kerrigan noted that the six public retail groups slashed their spending on stock buybacks ninety five percent to $36 million from a year earlier, when their stock prices were at an all-time low.
That gives her hope the publics will comeback to store acquisitions.
"With their stock price being up, they are choosing not to buy their stock and they’re enlargening their cash reserves," Kerrigan told Automotive News.
Dealership buy-sells fell in Q1, but advisers predict rebound
Slowing buy-sell market expected to rebound
Dealership buy-sell activity plummeted in the very first quarter from year-earlier levels. But buy-sell advisers are certain sales will rebound.
Amid softer new-vehicle sales, dealership prices are leisurely declining, buy-sell advisers say. Lower prices and tax reform could bump up the volume of deals by year end, they add, noting that public and private auto retailers as well as outside investors proceed to look for deals. In addition, publicly wielded retailers have more cash on forearm after sharply curtailing stock buybacks.
"Buyers proceed to be excited about auto retail so values remain strong for attractive deals, albeit they are increasingly picky and over-priced deals get little interest," wrote Alan Haig, president of Haig Playmates in Fort Lauderdale, Fla., in his quarterly Haig Report.
"The very first quarter of last year was a particularly big quarter, and this quarter was powerless," Haig told Automotive News. "From our own practice, there’s a lot going on. Lithia bought a deal, and there are other deals being done that are not in this quarter’s data but we know are coming."
Lithia Motors Inc., of Medford, Ore., purchased Baierl Auto Group in Pittsburgh this month.
Still, Haig predicted this year’s volume of deals will be slightly down from two thousand sixteen because "we’re already in a bit of a slot."
But he added, "I feel certain that subsequent quarters will be better than Q1."
The total number of U.S. dealerships bought by public and private buyers fell twenty nine percent to eighty rooftops in the very first quarter, said Haig, citing The Banks Report, in his report to be released today, May 29. ​
Haig said the U.S. presidential election may have delayed some deals in the very first quarter, as both buyers and sellers waited to see whether there would be a quick revision to tax rules.
"Another potential explanation is that buyers are increasingly worried about future profits and sellers are not willing to accept the prices being suggested," Haig wrote. He wrote that the buy-sell market has "passed the peak" in blue-sky values unless there is "a significant tax cut" that would benefit sellers.
He also noted a growing "realization on the part of many sellers that they will have to accept their current offers or retain the dealerships for at least several years more until they increase in value again."
Buy-sell adviser Erin Kerrigan, managing director of Kerrigan Advisors in Irvine, Calif., is more optimistic. She wrote in her quarterly Blue Sky Report to be released this week that two thousand seventeen "is tracking towards two hundred forty transactions for the year and pacing ahead of 2015’s record level."
Kerrigan noted that the six public retail groups slashed their spending on stock buybacks ninety five percent to $36 million from a year earlier, when their stock prices were at an all-time low.
That gives her hope the publics will come back to store acquisitions.
"With their stock price being up, they are choosing not to buy their stock and they’re enhancing their cash reserves," Kerrigan told Automotive News.