Berkshire Hathaway completes Van Tuyl acquisition
Warren Buffett: 'The fun has just started'
Editor's note: An earlier version of this story misidentified the sellers of Frank Kent Honda of Fort Worth, Texas.
Berkshire Hathaway Inc. has completed its purchase of the Van Tuyl Group, the largest dealership acquisition in industry history.
All aspects of the sale were finalized Monday, and the company has been renamed Berkshire Hathaway Automotive, headquartered in Dallas. The new Berkshire Hathaway Automotive now is the fifth-largest dealership group in the U.S., based on 2013 new light-vehicle retail sales. It has more than $9 billion in annual revenue, the company says.
“This is the beginning of a journey that will have no end,” Berkshire Hathaway Inc. CEO Warren Buffett said today in a statement. “Cecil and Larry [Van Tuyl] have given us the ideal platform with which to build an auto dealership business that will be thriving and growing 50 and 100 years from now. The fun has just started.”
Owner Larry Van Tuyl sold the group to Berkshire Hathaway and will continue as chairman of Berkshire Hathaway Automotive. His father, Cecil Van Tuyl, founded the dealership group.
“Mr. Buffett and I made this deal on a handshake, and it is no surprise that completing the transaction went smoothly and according to plan,” Larry Van Tuyl said in a statement. “Berkshire Hathaway’s acquisition of the Van Tuyl Group has been embraced by all internal and external stakeholders.”
Van Tuyl called Berkshire Hathaway the “perfect owners” of the business and thanked the dealership group’s manufacturer partners for what he described as “their universal support and approval of the transfer of their franchises.” He added that his father, who died in 2012, would be “very proud today.”
Berkshire Hathaway Automotive already has grown. Van Tuyl Group had 78 dealerships at the time the acquisition deal was announced in October. Today Berkshire Hathaway Automotive says it has 81 dealerships.
The company closed on one of those additional dealerships, Frank Kent Honda of Fort Worth, Texas, last week, buying it from Will Churchill and Corrie Watson. It bought a Ford dealership in San Jose, Calif., on Feb. 23. Both deals were in the Van Tuyl pipeline before the acquisition by Berkshire Hathaway.
The third additional dealership came about after a multi-franchise dealership in Springfield, Mo., was split after Van Tuyl built a new building and separated the franchises.
Jeff Rachor, who had been president of Van Tuyl Group, will be CEO of Berkshire Hathaway Automotive. Every managing partner at each Van Tuyl dealership has committed to staying on with Berkshire Hathaway Automotive and will remain equity partners in their respective dealerships, the company said. Those managing partners, who have minority ownership stakes and hands-on oversight of each dealership, are the cornerstone of the Van Tuyl business model.
“Our partners and 10,000-plus associates are extremely proud and excited about the bright future as Berkshire Hathaway Automotive,” Rachor said in a statement.
“We are all grateful that Mr. Van Tuyl found the ideal buyer to preserve the Van Tuyl business model and our unique entrepreneurial culture. The organization will continue to execute our simple strategy of operational excellence and sensible growth through acquisitions.”
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