The pace of dealership buy/sell transactions has picked up speed since COVID, making it difficult for store owners to keep their fingers on the pulse of the market. Recently, at the 2023 NADA Show, CBT News anchor, Jim Fitzpatrick spoke with Farid Ahmad, CEO of DSMA, an international mergers and acquisitions company, to hear his expert opinions on the state of automotive M&A in 2023.
Key takeaways:
1. Dealers have traditionally focused on the last three years of store performance to guide their valuations, however, since the market has varied wildly since 2020, most buyers now prefer to examine records dating back to at least five years to gain a more accurate understanding.
2. The mergers and acquisitions market was extremely active in 2022, and is likely to pick up even more pace in 2023.
3. The biggest challenge for dealership sellers is finding a buyer willing to engage in transparent negotiations.
4. Japanese brands are in high demand, however, South Korean-based Hyundai and KIA are quickly gaining interest.
5. Hiring a company or consultant specializing in acquisitions can give dealers a better sense of the true value of their assets and ensure they receive full compensation for the storefront.
“2023 will most likely see a steady valuations market.” — Farid Ahmad
Notable background:
— DSMA has overseen 378 dealership transactions in the last decade.
Click here for more 2023 NADA Show coverage on CBT News.
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