Kerrigan Advisors Presentation to AFSA Vehicle Conference 2017
20
To be sold to Gee Automotive Sold To Lithia Motors Sold To AMSI Sold To KDW Automotive Sold To McManes Auto Group MERCEDES-BENZ OF EDMONTON WEST Sold To Kendall Auto Group Sold To AutoNation Sold To Car Pros Sold To Victory Automotive Securities offered through Bridge Capital Associates, Inc. Member FINR
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Transcript of Kerrigan Advisors Presentation to AFSA Vehicle Conference 2017
To be sold toGee Automotive
Sold ToLithia Motors
Sold ToAMSI
Sold ToKDW Automotive
Sold ToMcManes Auto Group
MERCEDES-BENZ OF EDMONTON
WESTSold To
Kendall Auto GroupSold To
AutoNationSold To
Car ProsSold To
Victory Automotive
Securities offered through Bridge Capital Associates, Inc. Member FINRA, SIPC
New Vehicle Sales vs NADA Optimism Index
1899
1904
1909
1914
1919
1924
1929
1934
1939
1944
1949
1954
1959
1964
1969
1974
1979
1984
1989
1994
1999
2004
2009
2014
0
100
200
300
400
500
600
700
800
Source: SEC Filings
709.272008.11.20 – 2015.06.05Market Takes Off
968% Rise (Nov. 2008-June 2015)
Source: SEC Filings
4
Green Street Commercial Property Price Index
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016$60
$70
$80
$90
$100
$110
$120
$130$126
Source: Green Street Advisors, Wall Street Journal
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$279,685
$1,166,675
2000-2007Average Earnings $542,881
2008-2015
23% Compounded Annual Growth
New Normal or Peak?
Source: NADA and Kerrigan Advisors Analysis
Dec 99
Mar 04
May 08Ju
l 12
Sep 16
Nov 20
Jan 25
Mar 29
May 33Ju
l 37
Sep 41
Nov 45
Jan 50
Mar 54
May 58Ju
l 62
Sep 66
Nov 70
Jan 75
Mar 79
May 83Ju
l 87
Sep 91
Nov 95
Jan 00
Mar 04
May 08Ju
l 12
350400450500550600650700750
Source: SEC Filings
42% Decrease (June 2015-Jan. 2016)
408.812015.06.05 – 2016.01.28
17+ Million Sales Means Slower Future Growth
2010 2011 2012 2013 2014 2015 2016 -2.0
3.0
8.0
13.0
18.0
23.0
-6%
-1%
4%
9%
14%
19%
11.612.8
14.515.6
16.517.5 17.5
11% 10%
13%
8%
6% 6%
0%
TOTAL U.S. Light Vehicle YoY Growth
Annual Auto Sales and % Growth
2013 2014 2015 2016 YTD0%
5%
10%
15%
3.9%
8.3%
New Vehicles Sales Fixed Operations
New Vehicle and Fixed Operations Sales Growth for the Average Dealership
Source: NADA
US Units in Operation in Millions
2013 2014 2015 2016 2017E 2018E 2019E 2020E225
240
255
270
285
7% Expected Growth
Source: IHS Automotive
New Vehicle Used Vehicle Fixed Operations
6% 12%
45%
Average Dealership Gross Profit Margin by Department
2.1x
7.5x
Source: NADA
Number of Transactions2013 to 2016
2013 2014 2015 2016*
114 Transactions
206 Transactions
241 Transactions 229
Transactions+ 17%
*2016 represents first 9 months of acquisitions annualized
+ 81%
- 5%
101% Increase
Source: The Banks Report
2014 2015 2016 Annualized
50 51
65
Multi-Dealership Transactions
27%
Increase
Source: The Banks Report
2009 2010 2011 2012 2013 2014 2015
$594 $680
$816
$968 $1,000 $1,085
$1,230
Average Revenue of Top 119 Private Dealership Groups(in millions)
107% Increase
Source: Automotive News
US Dealership Market Share
14,930 dealerships are ownedBy small groups and individuals
Top 125 Dealership Groups
Small Dealership Groups and Individual
Dealers
5.2%
82.9%
0.118166666666667
Non-Public DealershipsPublic Dealership Groups
Source: Automotive News
Blue Sky Multiple Drivers
Average Blue Sky Multiple
Adjusted Blue Sky Multiple
Lower Multiple
Higher Multiple
High Growth
High Demand
FranchiseHighly
Suitable
Low Rent/ Image
Compliant
Low Growth
Low Demand
Franchise Unsuitable
High Rent/ Building Project
Earnings Growth
Expectations
Buyer Demand
Market Vehicle
Preference
Real Estate
16
Kerrigan Advisors Luxury Blue Sky Multiples
1
2
3
4
5
6
7
8
9
10
Source: Kerrigan Advisors Analysis, Automotive News
17
Kerrigan Advisors Non-Luxury Blue Sky Multiples
Toyota Honda Subaru Chevy Ford CJDR Buick/GMC
Nissan Hyundai Kia VW Mazda1
2
3
4
5
6
7
Source: Kerrigan Advisors Analysis, Automotive News
4 and Under 4 - 5 5 - 6 6 - 7 7 - Priceless
Average Kerrigan AdvisorsBlue Sky Multiple Ranges
More Operational Risk
Higher ROI
LowerROI
More Capital Risk
12/31
/2015350
400
450
500
550
600
544.452016.01.28 – 2016.12.30
27% Rise
Since Elec
tion
Source: SEC Filings
