Sonic last bought franchised stores in 2014 and for several years has been selling stores and focusing on expanding its used-only EchoPark unit. Now, largely done with divestitures and having improved company liquidity, Sonic again is looking for franchised stores that are a good culture fit, Dyke said.”We’ve got several new-car dealers on the radar screen now,” Dyke said. “It’s the first time we’ve had that in a long time.”
Several buy-sell experts have said that they expect the publics to be active in the market this year, with some of the quieter companies returning to purchase again.
“This growth, this expansion from Lithia and Asbury, will likely create an urge in those [other public] companies to grow again,” Alan Haig, president of Haig Partners, a buy-sell firm in Fort Lauderdale, Fla., said late last year.
Asbury, the seventh-largest U.S. new-vehicle retailer, last summer spent $735 million to buy eight luxury stores in the Dallas area that were part of Park Place Dealerships.
CEO David Hult this month called Asbury’s acquisition pipeline “active” and said conversations “dramatically picked up in January.”
Lithia, the third-largest U.S. dealership group, purchased about 30 stores last year that are expected to generate annual revenue of $3.5 billion. It also sold a handful of stores. Lithia aims to expand annual revenue to $50 billion in 2025, up from $13.1 billion in 2020. The company has said it has the ability to add $7 billion in annual revenue through dealership acquisitions this year and that purchase agreements for stores with more than $3 billion in revenue are slated to close early this year.
In January, Automotive News reported that Lithia plans to acquire Michigan’s Suburban Collection, a large, privately owned dealership group. That deal could close this spring or summer. Lithia also picked up two stores in Florida this month.