A partnership between publicly traded conglomerate Graham Holdings Co. and Chris Ourisman of Ourisman Automotive Group has expanded to 4 dealerships since early 2019, and the executives behind the pairing goal to proceed the expansion.
Final month, Graham and Chris Ourisman purchased a Ford dealership in Manassas, Va., marking Graham Ourisman Automotive’s fourth dealership in three years. The shop, Battlefield Ford of Manassas, which boasts a robust business truck enterprise, was bought Dec. 28 from Steve Fay of Battlefield Automotive, and the dealership was renamed Ourisman Ford of Manassas.
“It is simply such a high-performing dealership that there was actually enchantment for us due to the dimensions of it,” Ourisman stated. “It simply felt like a fantastic tuck-in for what we’re constructing out within the Washington, D.C., metro market.”
Ourisman advised Automotive Information that the dealership included a “nice staff already in place, a staff that is received actually nice outcomes that we expect that we will add to, [and] a staff that is pushed by integrity and values.”
Graham, which has different companies starting from TV stations and eating places to schooling firm Kaplan Inc. and a well being care group, declined to reveal the Ford dealership buy value. But it surely stated it holds a 90 p.c possession stake within the dealership and the three others it owns with Ourisman.
Ourisman now oversees 17 franchises and 15 dealerships between the shops in Graham Ourisman Automotive and people which might be a part of his household enterprise, Ourisman Automotive of Marlow Heights, Md. Ourisman Automotive was ranked No. 23 on Automotive Information‘ listing of the highest 150 dealership teams based mostly within the U.S. for 2019, retailing 31,798 new automobiles that 12 months. It wasn’t ranked on Automotive Information‘ most up-to-date listing because the group did not share information for 2020.
Graham Ourisman Automotive began when Graham and Chris Ourisman teamed up in early 2019 to purchase a Lexus retailer in Rockville, Md., and a Honda retailer in Tysons Nook, Va., from Sonic Automotive Inc. In late 2019, the companions added an open-point standalone Jeep dealership, Ourisman Jeep in Bethesda in Maryland.
The partnership did not discover many acquisition alternatives in 2021 that had been proper, Ourisman stated. However he stated he expects that as they proceed to judge shops to purchase this 12 months, “there’s going to be increasingly that align” with Graham Ourisman Automotive’s progress technique.
“We’re nonetheless all alternatives that make sense for us, and that is in metro D.C., but it surely’s additionally in different geographies throughout the nation,” Ourisman stated, including that the partnership is trying on the high 50 main metro markets throughout the U.S.
No shops are at present beneath contract, he stated. The partnership goals to compete for open factors — new retailer areas awarded by automakers — but it surely hasn’t been awarded something new, he stated.
Ourisman stated there’s “no ceiling” and “no flooring” to Graham Ourisman Automotive’s retailer rely. The partnership has thought-about shopping for a number of teams, starting from these with two shops to 16 shops, he stated.
The partnership “was created with the idea of constructing one thing actually massive,” Ourisman stated. “It was not made to construct one thing that form of feels snug and simply suits in properly with the established order.”
Graham Govt Vice President Jake Maas stated that the corporate considers its auto enterprise to be “a progress platform.”
“If we discover engaging acquisition targets that meet our standards that we will purchase for a good value, we would actually be fascinated about including extra dealerships to our operations,” Maas stated.
Graham has reported an uptick in income and earnings from the dealerships, disclosing that automotive working earnings was $4.5 million for the third quarter and $8.8 million for the primary 9 months of 2021. Third-quarter automotive income rose 10 p.c to $84.7 million, whereas income for the primary 9 months of 2021 jumped 33 p.c to $242.7 million.
Income rose due to gross sales progress on the then three dealerships and better costs for automobiles amid excessive client demand and stock shortages, Graham stated.
Along with the December acquisition, Graham Ourisman Automotive in 2021 invested in its CarCare to Go platform, a car upkeep and restore pickup and supply service.
Graham Ourisman Automotive final 12 months additionally acquired the true property for its Honda dealership in Tysons Nook from Capital Automotive. The Washington Enterprise Journal stated the $27 million deal closed in September.
Maas stated the lease time period was expiring and the partnership had a chance to purchase the land. Whether or not to purchase or lease dealership actual property will probably be thought-about on a case-by-case foundation, he stated.
“For that specific dealership, the best factor to do was to personal that property,” he stated.
The acquisition of Battlefield Ford required assuming a number of leases and originating two new leases masking a couple of half-dozen parcels on 11 acres, making it a extra advanced deal, stated James Mitchell of Cushman & Wakefield’s Dealership Capital Companies division. He and the agency’s Erin Rice represented the shop’s vendor, who he described as being at retirement age.
Mitchell stated they wanted a purchaser who “wasn’t afraid of a really difficult actual property construction with a number of leases.”
Cushman & Wakefield, which represented Sonic in its 2019 sale to the partnership, contacted Ourisman about Battlefield Ford in late summer time or early fall. The deal went beneath contract by the tip of October, and vendor Fay wished it closed by year-end for tax functions, a feat that was achieved, Mitchell stated.
Mitchell stated his agency is within the means of taking dealership platforms producing $600 million or extra in annual income to market and can share these alternatives with Graham Ourisman Automotive.
“Their plans are to have a major presence, actually within the mid-Atlantic after which long run within the East Coast,” Mitchell stated.
Graham views its tie-up with Ourisman as profitable, Maas stated.
The events got here collectively “with a long-term orientation and a perception that collectively we will construct a robust automotive enterprise,” he stated, “and we nonetheless very a lot have that perspective at present.”