Dealership Valuations

Going Beyond Basic Multiples in Valuating Dealerships

Dealerships are complex and specialized businesses, often with four or five separate departments operating autonomously. We know the intricacies of your industry and understand your opportunities and challenges. We regularly consult with dealers on a variety of issues related to ongoing operations and ownership transitions.

With dealerships, we know from experience that a basic multiple is not sufficient for determining a proper valuation. Instead, the focus should be on expected cash flow. That’s because the next five years of cash flow are unlikely to be similar to the last five years. Also, the analysis of future cash flow is consistent with the approach taken by the public automobile and truck retailers, as well as sophisticated buyers and sellers. 

We have performed valuation assignments for more than 1,000 dealerships nationwide to aid in:

  • Buy/sell transactions 
  • Estate planning 
  • Succession planning 
  • Purchase price allocation 
  • Annual impairment testing
  • Financing
  • Various forms of litigation

We can also provide valuation services when a dealer sells an individual franchise or personal goodwill assets, and we can help with new point proposals, expansion planning, and value maximization planning.

Here are a few examples of how we’ve helped our clients:

  • We completed a valuation analysis of a $1 billion+ private dealership group with 20+ stores in support of an employee stock ownership plan transaction.
  • We provided valuation services for a management buyout of a heavy truck dealer operating multiple locations.
  • We provided valuation services to support a successful IRS transaction audit in which a personal goodwill asset had been identified without initial supporting documentation.
  • We provided valuation services to support a successful IRS estate examination involving the majority ownership interest of a large luxury auto retailer.
  • We provided valuation review and consulting services during a complex marital dissolution involving multiple automobile dealerships, including a newly opened point.

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