Swickard Auto strikes gold out west

Haig said his buy-sell firm is seeing a heightened interest in transactions that include partnerships between investors and dealers, with some investors buying majority or minority interests in dealerships, especially amid higher store values.

“Some of those dealers are not at retirement age yet,” Haig said. “They still like being part of the industry, they still want to have a place to go to work and be part of a team, etc. And so the opportunity exists now when they can sell a majority stake or a minority stake that wasn’t common before. And so they’re saying, OK, well, I could sell a portion of my company at a high value, put a lot of cash in the bank to use for diversification. Or maybe they want to invest in three or four years when values are lower. They have different reasons for it.”

Crown Toyota is the only dealership in Swickard Auto’s portfolio with a majority stake ownership structure, though Gates said the group had a similar structure in a store previously.

Haig said the Elway group is continuing to buy powersports dealerships because they are cheaper than car dealerships and is focused on growing outside of California.

But he said in the Crown Toyota deal that the Elway partners “didn’t want to give up all the cash flows in that store. So by selling a majority stake, they took a lot of their chips off the table, but they still have a relationship with Toyota, they still are getting ongoing cash flow and that’s something that was appealing to them.”

Haig said Gagnet staying on at the store will provide stability in operations because the minority owners have a vested interest in the dealership’s success.

“It’s not likely to suffer any loss of personnel, any loss of momentum, any changes in terms of the sales volume, the customer experience, etc.,” Haig said.

Swickard Auto also has dealerships in Northern California, Texas, Oregon, Washington and Alaska. In July, Swickard bought a Porsche-Audi-Volkswagen dealership in Anchorage from Kendall Automotive Group. The July acquisition was Swickard’s first since it bought two General Motors stores in Alaska in December 2021, Gates confirmed.

Swickard, of Las Vegas, ranks No. 64 on Automotive News‘ list of the top 150 dealership groups based in the U.S., retailing 14,107 new vehicles in 2021. John Elway Dealership Group, of Englewood, Colo., ranked No. 102 on that list, retailing 10,120 new vehicles last year.