When its latest acquisition is complete early next year, AutoNation Inc. will become the largest retailer of Fiat Chrysler Automobiles vehicles in the U.S.
And though 2015 has been a busy deal-making year for AutoNation already, CEO Mike Jackson isn’t done. Jackson says he’s looking at more acquisitions, possibly before the end of the year. Through October, AutoNation has announced buy-sell transactions adding 33 stores and approximately $1.7 billion in annual revenue.
The company, the nation’s largest new-car retailer, could end up with deals adding $2 billion in revenue.
“We’re really close, and the year’s not over,” Jackson told Automotive News last week. “I wouldn’t rule it out. We have a lot of discussions going on, and I hope, not expect, that we can break through $2 billion this year of announced deals.”
Even without topping $2 billion, 2015 already is AutoNation’s biggest acquisition year since 1999. The retailer announced last week that it would acquire 12 dealerships in Texas from Allen Samuels Auto Group representing approximately $800 million in annual revenue.
Six of those are Chrysler-Dodge-Jeep-Ram stores. Of the $1.7 billion in annual revenue being added so far this year, the majority — $1 billion — is from FCA brands. The Allen Samuels stores will vault AutoNation past Lithia Motors Inc. as FCA’s largest retailer.
Jackson praised FCA’s leadership team and the automaker’s product pipeline, which he said he has seen for the next three years. He’ll continue to look for FCA stores.
“I have no hesitation buying big on Chrysler,” Jackson said. “I’m all in.”
The Allen Samuels deal is expected to close in early 2016 and remains subject to manufacturer approval. AutoNation currently has 240 stores in 15 states. That will grow to 265 stores upon completion of the Allen Samuels deal and a previously announced deal to buy 13 stores from Carl Gregory Enterprises. The Carl Gregory acquisition is expected to close by the end of this year.
Jackson sees the potential for another big year in 2016. “We have a level of conversation [with potential sellers] that we can do a lot of deals next year,” he said.
Current discussions primarily are for deals in AutoNation’s existing geographic footprint. But the company is starting to look outside that territory, Jackson says. Its first step into new markets would be for luxury dealerships because “you don’t need the critical mass you need with a volume brand,” he said.
The retailer is having conversations to buy luxury stores in metro areas outside its existing footprint, Jackson said.
