Kerrigan Advisors Represents Sunrise Auto Group in Sale of Two Memphis Dealerships to Lithia Motors
Kerrigan Advisors facilitated the sale of Sunrise Auto Group's two leading Buick GMC and Chevrolet dealerships in Memphis to Lithia Motors (NYSE:LAD). This transaction highlights the robust buyer demand in high-growth, business-friendly Southern markets. With this sale, Kerrigan Advisors has successfully handled over 80 franchise sales in the Southeast since 2020. Sunrise Auto Group, led by Bob Berkheimer for 35 years, is a significant player in Memphis, capturing 75% of the city's Buick GMC sales. The Sunrise dealerships are top performers, with Wolfchase ranking #4 in Tennessee and Collierville #7. Buick GMC and Chevrolet have shown impressive sales growth in 2023. Tennessee's business-friendly environment and population growth have driven substantial interest from major auto retailers. Legal counsel for the seller was provided by Holland & Knight.
- Kerrigan Advisors completed the sale of two high-performing Buick GMC and Chevrolet dealerships.
- Sunrise Auto Group captures 75% of Memphis’ Buick GMC sales.
- Sunrise Wolfchase is ranked #4 Buick GMC dealership in Tennessee.
- Buick GMC and Chevrolet are top domestic brands with strong sales growth in 2023.
- Tennessee ranked #3 in America's Top States for Business by CNBC.
- The transaction adds to Lithia Motors' footprint in the attractive Tennessee market.
- Potential for shareholder dilution as Lithia Motors expands.
- Increased competition in the Southern auto retail market could affect margins.
- Transition risks as Sunrise Auto Group changes hands.
The acquisition of Sunrise Auto Group's top-performing Buick GMC and Chevrolet dealerships by Lithia Motors is a significant move in the automotive retail sector. This deal highlights the ongoing consolidation trend in the industry, where larger automotive groups are expanding their footprint through acquisitions. For Lithia Motors, this acquisition represents an opportunity to tap into the growing and business-friendly market of Tennessee, which has seen substantial population growth and strong buyer demand.
In the short term, this acquisition could boost Lithia Motors' revenue through increased sales volumes from these high-performing dealerships. In the long term, the strategic location in a high-growth area and the established customer base of Sunrise Auto Group can provide a steady stream of revenue. However, investors should be cautious about potential integration challenges and the need for significant capital expenditure to maintain and possibly upgrade dealership facilities.
For retail investors, it's essential to watch how Lithia Motors integrates these new assets and whether they can maintain the high standards set by Sunrise Auto Group. Additionally, evaluating Lithia Motors' overall strategy for future acquisitions and market expansion will provide insights into its long-term growth potential.
The sale of Sunrise Auto Group to Lithia Motors underscores the attractiveness of the Southern U.S. market for automotive retailers. Tennessee’s favorable business environment, characterized by its right-to-work status and lack of state income tax, makes it an appealing destination for businesses seeking growth opportunities. This acquisition aligns with broader industry trends identified in Kerrigan Advisors’ 2023 Dealer Survey, which anticipates high franchise valuation growth expectations in the region.
For Lithia Motors, entering the Memphis market, the third-largest metro area in the Southeast, provides access to a robust trade and transportation sector. This strategic move can enhance Lithia’s market presence and leverage the high-growth potential in the Southern states. Retail investors should consider the implications of this acquisition on Lithia’s market positioning and its ability to capitalize on regional growth trends. The strong performance of domestic brands like Buick GMC and Chevrolet, noted for their sales growth in 2023, further reinforces the potential for sustained revenue growth from these newly acquired dealerships.
Sale of top volume Buick GMC and Chevrolet dealerships in
Owner Bob Berkheimer started Sunrise Auto Group 35 years ago in
“Kerrigan Advisors was extremely honored to represent Bob’s legacy in
“First and foremost, I want to thank our employees and the
Bob continued: “We knew that the buy/sell process would be complicated, and we wanted to get it right, so we hired the firm that was recommended as the best in the business – Kerrigan Advisors. And they more than lived up to their reputation, guiding us with care, expertise and acumen every step of the way, completing the transaction.”
“The Southeast and, in this case,
Stephen Dietrich and Brooke Sizer of
About Kerrigan Advisors
Kerrigan Advisors is the leading sell-side advisor and thought partner to auto dealers nationwide. Since its founding in 2014, the firm has led the industry with the sale of over 270 dealerships representing more than
Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, which includes Kerrigan Advisors’ signature blue sky charts, multiples, and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases monthly The Kerrigan Index™ composed of the seven publicly traded auto retail companies with operations focused on the US market. The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here. To read the 2023 Kerrigan Dealer Survey, click here. To read the 2023 Kerrigan OEM Survey, click here. Kerrigan Advisors also is the co-author of NADA’s Guide to Buying and Selling a Dealership.
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Kerrigan Advisors Media Contact:
Melanie Webber (melanie@mwebbcom.com)
mWEBB Communications
949-307-1723
Source: Kerrigan Advisors
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