On the latest episode of Inside Automotive, Jim Fitzpatrick sits down with Gabe Robleto, Senior Vice President of Kerrigan Advisors, to break down the latest Q2 2025 Blue Sky Report, revealing record-breaking automotive buy-sell activity, rising valuations, and market trends shaping dealership M&A across the U.S.
According to Robleto, the U.S. automotive buy-sell market is showing unprecedented strength in 2025, fueled by rising dealer earnings, strategic acquisitions, and renewed buyer confidence.
“The pipeline remains robust for the rest of 2025."
Despite a slow start to the year, transaction activity surged in the second quarter, with 220 buy-sell deals completed in the first half, an 8% year-over-year increase. Over the trailing 12 months, the industry recorded 454 completed transactions, the highest on record.
“Earnings are up 13% in the first half of 2025 versus last year… and access to capital remains robust,” Robleto said. “Public groups alone are sitting on $8.6 billion in liquidity at the end of June, the highest level ever.” Pent-up consumer demand stemming from the pandemic and a fleet now averaging nearly 13 years old is also contributing to vigorous market activity.
Private dealers lead the market
Private dealer groups dominated the first half, capturing 82% of all buy-sell activity, primarily driven by tuck-in acquisitions. Two-thirds of the franchises acquired were absorbed by buyers already active in the market. This trend is intensifying competition for top franchises and driving blue sky multiples higher, which rose about 3% quarter-over-quarter and now sit 75% above pre-pandemic levels.
The nullification of the CARB EV sales mandate has further shifted the market, particularly in California and New England. EV sales slowed in 2025, while fuel-efficient hybrids reached a record 14% market share in the second quarter. “Blue sky discounts applied to CARB-affected states in 2024 have largely evaporated, with buyer demand improving significantly,” Robleto said.
Major transactions illustrate the trend. Sonic’s acquisition of Kerrigan Advisors’ client U.S. Auto Trust’s JLR platform in California made it the largest JLR dealer in the U.S., while Asbury’s $1.5 billion purchase of Herb Chambers in New England ranked among the largest deals in automotive retail history. The Asbury transaction carried a 5.6x blue sky multiple, representing 25% of revenue.
Market outlook
Kerrigan Advisors also made updates to select franchise multiples this quarter, reflecting shifts in sales and tariffs. Ford and Buick GMC saw increases in low multiples due to strong sales, while Audi, Volkswagen, and Volvo experienced reductions amid weaker earnings and tariff pressures.
Looking ahead, Robleto expects higher blue sky values to encourage more sellers and further increase buy-sell activity. Ultimately, Robleto urges dealers to focus on targeted acquisitions, improve operational efficiency, and capitalize on unique market opportunities to enhance profitability.
