Success in Dealership Sales and Acquisitions Requires Due Diligence

DCG's Stephen Jones

In the buying and selling of dealerships, one of the most critical aspects is having the right information to evaluate and ultimately craft both the sale and the purchase. No buyer or seller wants to be surprised with unknown information after the closing. Surprises should be reserved for birthdays, and not business deals.

As a full-service merger and acquisition (M&A) specialist, Dave Cantin Group’s greatest value is in the professional analysis it provides to both buyers and sellers. The experienced team carefully analyzes an acquisition before bringing it to market. The point is not just to sell the dealership but set it up for future success after the closing, according to Stephen Jones, National Director of Acquisitions for Dave Cantin Group (DCG).

“We review the current and historical financial statements in order to identify trends in different categories of revenue generation and expenses,” he said in a recent video describing the research and analysis process. “Our team also incorporates performance documents from the manufacturer into our analysis.”

Manufacturers will have a good idea of how and to what degree the the store should be performing, and this information is highly valuable to the sales and purchase processes. It’s one element in determining where a store’s upside potential is, and how the new owner can capture that potential.

As part of DCG’s analysis, in-depth executive summaries are created that are designed to inform buyers of the entire acquisition package. DCG analysts take the time to paint a picture that truly helps support the transaction for both the buyer and the seller.

“We work to determine the best way to tell the story and to provide the critical information required by the decision makers,” said Jones. “We recently had a buyer call us up and say, ‘Wow, this is everything we generally spend our time looking for. This saved us to much time and effort.’ If we can free up your time and resources, you can focus on the closing, and we have done our job.”

Another critical aspect of the acquisition process is the careful matching of buyers and sellers to ensure a mutually beneficial transaction. This includes taking the time to truly understand what buyers and sellers are looking for in the acquisition.

“We guarantee our sellers that confidentiality is of the utmost importance, and that the next owner will be factory approvable and financially capable of acquiring their business,” said Jones. “With buyers, we help them to understand how this acquisition fits in with their current platform and how to best structure the acquisition based on our in-depth analysis and knowledge of the competitive landscape.”

The point is to ensure that buyers and sellers are starting from a point of success after the transaction.

“At DCG, we pride ourselves on creating successful synergies between buyers and sellers, ensuring the next owners are set up for success for generations to come,” noted Jones.