Morgan Auto Group acquires huge FL dealership, Lithia scoops up 2 stores in TN (2024)

Morgan Auto Group acquires huge FL dealership, Lithia scoops up 2 stores in TN (1)

151 dealerships changed hands in Q1, the highest level of first-quarter buy-sell activity on record, according to Haig Partners. Right now, many dealers have a bullish outlook on the car market and significant cash reserves to deploy in the M&A space, setting the stage for more high-value transactions. Let’s take a closer look at 5 recent deals to get a pulse on what brands and regions saw meaningful movement in May and June.

1. Hollywood Kia

At the beginning of June, South Florida-based Hollywood Kia was sold to Morgan Automotive Group, setting a record for the highest price for a Kia dealership. One of the former owners, Joe Levy, owned Hollywood Kia for 16 years. In the earlier days, the store was only selling 8 units a month and losing more than a million dollars a year. Steve Gutstein became a partner in 2019 and together, they built the store into the no. 2 highest-volume Kia dealership in the country and no. 1 in the Southeast region. From the beginning of the year through May, Hollywood Kia has sold 1,582 units.

Morgan Auto Group acquires huge FL dealership, Lithia scoops up 2 stores in TN (2)

Haig Partners, which served as the deal’s sell-side advisor noted in a press release that dealerships in South Florida have become extremely valuable due to the climate, low taxes, and business-friendly laws. When discussing the transaction, Levy remarked, “The auto industry is becoming a more complex business where companies like Morgan Auto Group will thrive in the future. Larry “Captain” Morgan and I became friends during this process, and I know they will take good care of our people.” With this purchase, Morgan Auto Group now owns 77 dealerships.

2. Greenway of the Shoals

Greenway Automotive sold Greenway of the Shoals, which includes 4 of its Alabama dealerships representing Toyota, Honda, Nissan, and CDJR brands, to ZT Automotive in May. With this sale, ZT Automotive is establishing its footprint in Alabama and now owns 13 total dealerships. Its other 9 stores are located in Florida, Georgia, and Texas. Greenway Automotive still owns more than 30 dealerships after this transaction but doesn’t plan on selling more anytime soon. Instead, the group plans to reallocate the capital to purchase more stores in larger markets.

“This transaction demonstrates that the demand for auto dealerships remains strong even as profits have begun to tick down. … Buyers expect that dealerships will continue to provide an attractive return on investment and have confidence in the diversified business model, which brings healthy profits in almost all economic environments,” stated Haig Partners, the sell-side advisor for this deal. Haig Partners has been involved in the purchase or sale of 194 dealerships in the Southeast, according to a release, demonstrating the robust demand for locations in this region.

3. Sunrise Wolfchase Buick GMC and Sunrise Buick GMC Collierville

Along with private sales, public dealership group Lithia Motors is still on the acquisition path. Sunrise Auto Group sold two of its Tennessee-based dealerships to Lithia in June, including the no. 1 Buick GMC dealership in Memphis, Sunrise Wolfchase Buick GMC. This store represents over 75% of Buick GMC sales in the city. Owner Bob Berkheimer started Sunrise Auto Group 35 years ago and has grown Wolfchase to the no. 4 Buick GMC dealership in Tennessee. Buick GMC Collierville is the no. 4 Buick GMC dealership in Memphis and no. 7 in Tennessee overall.

Morgan Auto Group acquires huge FL dealership, Lithia scoops up 2 stores in TN (3)

Kerrigan Advisors, the sell-side advisor of this transaction, said in a statement, “The Southeast and, in this case, Tennessee, remains the go-to market for auto retailers, and we see most of the larger players in automotive retail seeking to expand their footprint in the South.” Ranked no. 3 on CNBC's Top States for Business list, the state offers a right-to-work environment and no state income tax. This combination has fueled meaningful population growth, a key consideration when it comes to buy/sell deals.

4. Northwest Chrysler Dodge Ram Jeep

The sale of Southern dealerships continues with Keating Auto Group’s acquisition of Northwest Chrysler Dodge Ram Jeep in Houston, Texas, previously owned by the third largest private dealership group in the U.S., Ken Garff Automotive Group. Keating will now have the substantial advantage of a large customer base that leans toward trucks and SUVs. In 2023 a whopping 78% of new vehicles sold in the city were light trucks. This could mean big profits for dealerships like Northwest CDJR, which specializes in these types of models. Parent company Stellantis is also a leader in plug-in hybrids. Jeep dominates Houston's plug-in hybrid market, with the Wrangler and Grand Cherokee ranking as the top two choices in the city in 2023.

“As evidenced by the level of interest we saw in this high-volume metro store, Texas is one of the hottest markets in the country. As they say, everything is bigger in Texas! We are proud to have found the right buyer for this dealership, one who understands the scope of this market and who will continue Northwest CDJR’s success,” said sell-side advisor Kerrigan Advisors.

5. Groove Chrysler, Dodge, Jeep, Ram, and Groove Subaru

Further out West, Alex Gillett sold 2 dealerships near the South of Denver, Colorado, to Van Olp, president of Autostar Family Dealerships in May. The dealerships will be renamed to Auto Star Chrysler, Dodge, Jeep, Ram and Auto Star Subaru. This is the latest in a long string of Colorado-based transactions for for buy-side advisor Pinnacle Mergers & Acquisitions. The state's consistent population growth creates a steadily expanding customer base. Additionally, Colorado's reputation for outdoor recreation fuels demand for vehicles like the SUVs, trucks, and adventure-ready models that CDJR and Subaru offer.

Pinnacle has previously represented Bill Piercey in selling his Honda store in Colorado Springs to Groove Auto Group. Other transactions include the sale of a Kia dealership in Grand Junction to Steven Dahle and Red Rock Auto Group, and the sale of Honda of Glenwood Springs to Phil Long Automotive Group.

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Morgan Auto Group acquires huge FL dealership, Lithia scoops up 2 stores in TN (4)

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Morgan Auto Group acquires huge FL dealership, Lithia scoops up 2 stores in TN (2024)
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