The flurry of acquisitions this 12 months follows McGovern Automotive final October buying a uncommon Ferrari-Maserati dealership, shopping for Ferrari-Maserati Long Island in Plainview, N.Y., from Experience Auto Group.
With all its progress, McGovern stated his group is on monitor to generate $1.8 billion in annual income for 2022 and to promote greater than 27,000 new and used automobiles mixed this 12 months.
McGovern, 52, stated that after graduating school, he labored for an accounting agency that specialised in auto dealership work. He stated he finally went to work for a dealership shopper that was offered to Group 1 Automotive Inc. in 2000. With Group 1, McGovern stated he labored because the Northeast area CFO. He left Group 1 and in 2007 co-founded Prime Motor with David Rosenberg and David Abrams of Abrams Capital.
McGovern stated he left Prime Motor in early 2016, earlier than Prime in 2017 mixed with GPB Capital Holdings’ Capstone Automotive Group to create Prime Automotive Group.
On his personal, McGovern stated he purchased his first retailer in September 2016, a Chrysler-Dodge-Jeep-Ram retailer in Newton, Mass., with some monetary assist from his sister.
“It was a pleasure to shuffle across the street and get rolling on my own with a great, great management team,” McGovern stated. “So we quickly bought four dealerships in quarter four of 2016: another Hyundai store, a Honda store, and I was able to buy our Toyota store in December of 2016. And that combination of stores has fueled my growth in terms of extreme profitability right from the get-go.”
In mid-2018, McGovern stated he added his first luxurious dealerships, shopping for Audi and BMW in Shrewsbury, Mass., and in June 2020 he added his first Porsche dealership, additionally on Long Island.
“It was March of 2020, and I put it under agreement,” he recalled. “I was sending out the $500,000 deposit and my CFO said, ‘What? Are you crazy? There’s a pandemic going on.’ And I was like, I’m not crazy. And I think on the other side of this, it’s going to be really, really good.”
The Lundgren retailer helps McGovern have some efficiencies in western Massachusetts, he stated, and follows the strategic acquisition this 12 months of Dillon Chevrolet to assist with the group’s new municipal division. McGovern stated he goals to promote municipal automobiles similar to police and upkeep automobiles “to cities and towns all over Massachusetts, Rhode Island, New Hampshire and as well as possibly the state police in Massachusetts.”
With the Bill Dube Hyundai acquisition, Scott Dube joined McGovern Automotive as vp of presidency and trade relations. Dube, who additionally will proceed to serve on the board of administrators for the National Automobile Dealers Association, stated he retained a minority curiosity within the dealership, however he didn’t disclose it.
Dube informed Automotive News that he did not need to promote his retailer, however discovered that “timing’s everything.”
“Interest rates are rapidly increasing, gas prices are rapidly increasing, inflation is rapidly increasing,” he stated, including that these adjustments put stress on the household enterprise.
He stated it additionally was time for his household to reduce danger publicity provided that “there continues to be uncertainty around inventory.”
He stated that whereas low stock for brand new automobiles has helped sellers’ profitability, it is unclear how lengthy that can final.
But McGovern sees at the very least a couple of good years forward for auto retailers.
“We’re going to stay pretty aggressive,” he stated of offers that “make sense. I think there’s a solid one to two years at least of really good automotive times. So I think it makes sense to be bullish still.”
Woody Woodward and Brian Brown of DCG Acquisitions, a Dave Cantin Group firm, dealt with the McGovern-Lundgren transaction.