In the final quarter of 2021, Group 1 Automotive closed a deal to acquire nearly all of Prime Automotive’s assets. As we ushered in a new year and former executives and employees have now moved on, we’re checking in with the former CEO of Prime Automotive Group, now known as Ira Motor Group, Todd Skelton. Today, we get his perspective on the sale, the impact, and we’ll also get into the current state of automotive from his perspective.
Skelton began his tenure with Prime Automotive Group in January of 2020, only a few weeks before the start of COVID-19. He knew coming into the position that Prime had some obstacles to overcome. In fact, three days on the job, Mercedes-Benz handed termination notices to four of Prime’s franchised dealers. After some tense negotiations, Skelton convinced Mercedes to rescind the notices. A little over a year later, David Gentile, the CEO of GBP Capital, Prime Automotive’s holding company, was criminally indicted by the SEC on fraud charges. However, through all of the headlines, Skelton says they were able to triple the value of the company in roughly two years. This, of course, laid the groundwork for Group 1 to step in and purchase all 27 stores in a single transaction.
“The key was to keep the stores running, to keep all this nonsense away from them and not lie to them,” says Skelton. “But, to tell them, look- it’s going to be okay, we’re gonna get through this. You guys need to keep performing.”
The auto industry is always changing and industry consolidation shows no signs of slowing down. However, Skelton doesn’t believe consolidation will make smaller dealers obsolete. He doesn’t foresee consolidation beyond 5%, despite groups like Lithia buying up stores left and right.
As for Skelton, he is getting ready to make waves in the big truck business. Through private equity, Ascendants Trucking aims to do consolidation on 18-wheelers. Right now, the company is scaling in New England with plans to move its headquarters down to Delray Beach, FL.
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