FI showroom red and grey logo
MenuMENU
SearchSEARCH

Auto Dealer M&A Activity Declines

A new report indicates that merger-and-acquisition activity among public dealer groups dropped 55 percent in the first half of 2012.

by Staff
August 21, 2012
2 min to read


SAN FRANCISCO — The Presidio Group LLC, through its subsidiary Presidio Merchant Partners LLC, today released its “Automotive Retail M&A Market Report” for the first half of 2012. It revealed that auto dealer mergers and acquisitions dropped 55 percent.

After completing $229 million in U.S. dealership acquisitions in the first half of 2011, public companies spent just $103 million to acquire U.S. dealerships in the first six months of 2012, a 55 percent decline, according to corporate filings with the Securities and Exchange Commission and Capital IQ. Acquisition activity by private dealers also appears to have slowed.

Ad Loading...

The industry views the drop in activity as a fundamental disagreement on price. Buyers see economic and political uncertainty and better uses for their capital, while sellers are experiencing record profits and anticipating continued growth, the report concluded.

Industry multiples have begun to contract as the potential for earnings growth slows. Auto group investors valued public retailers at 12.2x normalized earnings per share in June of 2012, down from 18.2x in June 2011, a 33 percent decline, according to Capital IQ.

As their multiples fall, public companies are less likely to pursue acquisitions in the U.S. market, the corporate SEC filings indicated. Over the past decade, 28 percent of the cash flow from public retailers was spent on U.S. acquisitions. Over the past six months, just nine percent went towards U.S. acquisitions while 51 percent was used to buy back company stock.

According to Automotive News, public retailers are actually shrinking in size, with the total number of dealerships owned by public companies falling from a peak of 884 in 2004 to 744 in 2011.

Multiples on private dealerships appear to also have fallen for many franchises, as buyers are more concerned with risk than earlier in 2012, and are finding other uses for capital.

Ad Loading...

Despite the decline in acquisitions, trends remain favorable for increasing auto sales due to aging vehicles and easy credit for buyers, with most experts predicting auto sales in 2012 to increase 9 to13 percent over 2011.

Private dealerships appear to be on their way to recording all-time highs in profitability, according to data provided by the National Automobile Dealers Association, and the value of large dealership groups has increased by an estimated 23 percent from 2006.

Dealers are aging and many will want to sell their companies in the next few years, the report stated. Since dealership sales activity has been below normal levels since the beginning of the recession, there is "pent-up demand to sell" that may lead to higher transaction volumes in the future.


More F&I

Under the hood of a Toyota Prius EV Hybrid car.
F&Iby StaffJune 15, 2026

New Lifetime Battery F&I Product Meant to Drive Dealer Traffic

EFG Cos. offering is intended to create lifetime auto dealer engagement with customers.

Read More →
Several illustrations of question marks on a surface
F&IJune 10, 2026

The Psychology Behind Menus That Increase Add-On Sales

There is a science to crafting a menu that gives customers confidence in the choices presented, and moving the process outside the F&I office can further boost results.

Read More →
Man holding magnifying glass over sales volume paper.
F&IMay 29, 2026

Why Your F&I PVR Is Misleading You

Here’s a handy checklist of the numbers to track in 2026 instead.

Read More →
Ad Loading...
Photo of woman typing on a laptop as she sits on a couch
F&Iby Hannah MitchellMay 29, 2026

Auto Consumer Anxiety Presents Opportunity

A survey of U.S. drivers found the majority are concerned about finances and the economy, but those fears make many ready to buy vehicle-protection products.

Read More →
Dustin Gingerich standing on stage giving a presentation
F&Iby Lauren LawrenceMay 28, 2026

Humble and Hungry: 12 Rules for an F&I Life

Dustin Gingerich, with a decade in the F&I business under his belt, shares his thoughts on leadership, building trust with customers, and the importance of learning and innovation.

Read More →
Photo of businessman's hands resting on files on a desk
F&Iby John TabarMay 27, 2026

Focus on the Opening

F&I managers must learn as much as possible about their customers, starting before they walk into their offices. The bulk of today’s consumers expect that, and good results will follow.

Read More →
Ad Loading...
Photo of a three-seat vehicle back seat
F&Iby Hannah MitchellMay 22, 2026

F&I Reaches for the Sky

The increasingly important profit center continued making gains in the first quarter, according to StoneEagle data, ancillary products proving more popular as consumers hold onto their buys longer.

Read More →
Cover image for a BOK Financial report titled “Timing the market: How avoiding volatility entirely can hurt long-term reinsurance program performance.” The image shows several road construction barricades with flashing amber warning lights lined up in a nighttime work zone. Beneath the image, red text explains that avoiding volatility can mean falling behind inflation and missing market rebounds that drive long-term surplus growth. The BOK Financial logo appears at the bottom right.
SponsoredMay 8, 2026

What Market Timing Mistakes Mean for Your Reinsurance Program

When volatility hits, dealer-owned reinsurance programs face a familiar temptation: pull back and wait for calmer waters. New data from BOK Financial shows why that instinct can quietly cost you years of surplus growth.

Read More →
Ryan Ruff, The 90/10 Rule, Automotive Training Academy, Sales Series
F&IMay 6, 2026

The 90/10 Rule

In this video, Ryan Ruff explains the rule that elite sales professionals use to turn ordinary conversations into unforgettable customer experiences.

Read More →
Ad Loading...
Photo of essential oil diffuser on desk next to laptop
F&IMay 4, 2026

Your Office Is Talking

What’s the atmosphere saying about you to your customers? You can make minor adjustments and additions that transform your space into one that creates trust with the people on the other side of the desk.

Read More →