RFJ Auto Partners Inc., a fast-growing new dealership group backed by private equity, acquired two of the highest-volume stores in the U.S. when it bought Dave Smith Auto Group.
The deal, completed April 20, marks RFJ's expansion to the Northwest. The Dave Smith stores, in Kellogg, Idaho, will be a base for further growth in that region, said Rick Ford, RFJ's president. The owners of Dave Smith, led by Ken Smith, now become partners in RFJ and will help the Plano, Texas, dealership group replicate the Dave Smith approach at other RFJ stores going forward.
"We're going to really expand the Dave Smith brand throughout the Northwest corridor," Ford told Automotive News. "It's our intention for RFJ to adopt a lot of the operating processes the Dave Smith brand has been so good at developing."
Dave Smith could ultimately become the national brand for the dealership group once its approach has successfully spread across the company, Ford said. While there's no firm decision on that today, Ford is counting on acquiring more stores in the Northwest -- and soon. He and Ken Smith were meeting with other potential sellers even before the Dave For Ken Smith, the deal is a way for his family to expand.
"Something we've wanted to do for a long time is take the Dave Smith name out on the road and invest in some other dealerships, but it takes a lot of cash to do that," Smith said.
Formed in February 2014 with the backing of Jordan Co., a New York private equity firm, RFJ has the cash. It is now up to 24 dealerships. RFJ's goal is to represent every brand in the industry with stores under the Dave Smith name in the Northwest, Ford said. The company will focus on acquiring stores representing mainstream brands in 2015 and start looking to luxury-brand stores in 2016, he said.
Smith will be president of RFJ's Northwest platform and dealer principal for all acquisitions in the Northwest going forward. His siblings, Eric Smith and Michelle Dahl, also will be partners. Ford and Smith declined to share terms of the deal.