Deal Closures on The Rise for Leading Automotive Dealership M&A Firm, Bucking Industry Trend
A recent report regarding global M&A activity in the auto-industry cites that deal volume declined by 18% in 2019 compared to transactions completed in 2018. Despite this trend, the report goes on to say that 2019 ended strong for global M&A deal closures, with eight deals inked in Q4 alone that exceeded $1 billion, boosting the deal value to a total of $77.5 billion for the 867 completed transactions for the year.
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Bucking this downward trend in overall deal volume is Dave Cantin Group (DCG), one of the world’s largest automotive dealership M&A firms, who closed more than 90% of its M&A deals in 2019, with the fourth quarter being the strongest of the year. This bump in activity tracks back to the firm’s dual agent model, which allows them to consistently yield higher closing ratios by simplifying the process for owners who are ready to either transition into or out of the business. The group’s closure rate for 2019 is a 20% increase over the previous year, and the firm expanded to represent dealerships in all 50 states.
While 2019 was a record-smasher, 2020 is shaping up to be another incredible year for DCG, with 10-12 deals expected to close in Q1 2020, a record-breaking number of transactions for the firm. Dealerships looking to buy or sell in 2020 might be wondering if this pace will continue through the next three quarters of the year. While it’s difficult to forecast overall deal flow due to the unpredictability of the markets, one industry trend remains true: owners will still need to buy or sell their businesses. Regardless of what 2020 holds when it comes to deal volume, duel agents like DCG will continue to ensure that each transaction is handled with integrity and care by putting their client’s needs first.