An increasing Swickard Auto Group entered Southern California by way of a majority stake buy of John Elway’s Crown Toyota in Ontario, one of many Japanese automaker’s highest-volume U.S. dealerships.

And the dealership’s price ticket additionally fetched near-record blue sky worth, based on the dealer who facilitated the sale. Blue sky is the intangible worth of a dealership, together with goodwill.

Swickard Auto on Aug. 22 purchased a 90 p.c stake within the dealership simply east of Los Angeles from Elway, Mitch Pierce, Dan Grubb and Paxton Gagnet, mentioned Swickard’s Greg Gates, vp of enterprise transformation. The 4 Elway companions collectively saved a ten p.c stake within the dealership, Gates mentioned.

Gagnet will keep on as the shop’s common supervisor and the dealership’s title won’t change, Gates mentioned.

“Crown Toyota was a possibility to actually get a foothold in Southern California,” Gates informed Automotive Information. “What we have discovered over time is it is sensible to have some scale after we go into a brand new market. The beauty of a spot like Crown Toyota is simply the dimensions of the operation. I imply, with one retailer you nearly instantly obtain scale due to the dimensions of the operations.”

Alan Haig, president of Haig Companions, a buy-sell agency in Fort Lauderdale, Fla., which facilitated the Swickard-Elway transaction and labored with each events, described the shop as “one of many top-performing dealerships within the nation.”

John Elway’s Crown Toyota was among the many high 10 within the U.S. by way of new-vehicle gross sales quantity in 2021, Toyota Motor North America confirmed to Automotive Information.

Elway, a former NFL star and longtime Denver Broncos quarterback, owns a number of dealerships with companions. He bought into dealership possession years in the past and offered quite a few shops in 1997 to Republic Industries Inc., which later grew to become AutoNation Inc.

In June, John Elway Dealership Group offered John Elway’s Claremont Chrysler-Dodge-Jeep-Ram in California to Canadian auto retailer Knight Automotive Group.

Haig Companions believes, primarily based on its evaluate of public auto retailers’ regulatory filings and its business information, that the Swickard-Elway transaction garnered near-record blue sky worth.

Haig mentioned what Swickard Auto paid for almost all curiosity in John Elway’s Crown Toyota — which he declined to reveal — is decrease than the $206.5 million in blue sky worth it says Group 1 Automotive Inc. paid in March when it acquired Charles Maund Toyota in Austin, Texas. Haig, citing Group 1’s first-quarter regulatory submitting for the determine, mentioned that’s the highest quantity paid for blue sky that it is aware of of for any dealership. Group 1 declined to touch upon the acquisition worth or the way it ranked towards different purchases.

Gates additionally declined to reveal what Swickard Auto paid for almost all stake.

“The truth that dealerships now are price two or 3 times what they had been price earlier than the pandemic, even simply by that alone, sort of precludes the previous offers from surpassing this,” Haig informed Automotive Information. “And between the Swickard people and the house owners of the Elway retailer, no one can consider any retailer that is offered for a better quantity than this one, aside from Charles Maund, of any franchise wherever within the nation.”

Haig mentioned his buy-sell agency is seeing a heightened curiosity in transactions that embody partnerships between buyers and sellers, with some buyers shopping for majority or minority pursuits in dealerships, particularly amid larger retailer values.

“A few of these sellers will not be at retirement age but,” Haig mentioned. “They nonetheless like being a part of the business, they nonetheless need to have a spot to go to work and be a part of a staff, and so forth. And so the chance exists now once they can promote a majority stake or a minority stake that wasn’t frequent earlier than. And they also’re saying, OK, nicely, I may promote a portion of my firm at a excessive worth, put a whole lot of money within the financial institution to make use of for diversification. Or perhaps they need to put money into three or 4 years when values are decrease. They’ve completely different causes for it.”

Crown Toyota is the one dealership in Swickard Auto’s portfolio with a majority stake possession construction, although Gates mentioned the group had the same construction in a retailer beforehand.

Haig mentioned the Elway group is continuous to purchase powersports dealerships as a result of they’re cheaper than automotive dealerships and is targeted on rising exterior of California.

However he mentioned within the Crown Toyota deal that the Elway companions “did not need to quit all of the money flows in that retailer. So by promoting a majority stake, they took a whole lot of their chips off the desk, however they nonetheless have a relationship with Toyota, they nonetheless are getting ongoing money stream and that is one thing that was interesting to them.”

Haig mentioned Gagnet staying on on the retailer will present stability in operations as a result of the minority house owners have a vested curiosity within the dealership’s success.

“It isn’t more likely to endure any lack of personnel, any lack of momentum, any modifications by way of the gross sales quantity, the client expertise, and so forth.,” Haig mentioned.

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

Swickard, of Las Vegas, ranks No. 64 on Automotive Information‘ record of the highest 150 dealership teams primarily based within the U.S., retailing 14,107 new autos in 2021. John Elway Dealership Group, of Englewood, Colo., ranked No. 102 on that record, retailing 10,120 new autos final yr.

Swickard Auto Group, one of many largest personal dealership teams within the nation, entered Southern California when it purchased a majority stake in a high-volume Toyota dealership from former NFL quarterback John Elway and companions.

Swickard Auto Group, one of many largest personal dealership teams within the nation, entered Southern California when it purchased a majority stake in a high-volume Toyota dealership former NFL quarterback John Elway and companions.