DARCARS Automotive Group is in talks with several U.S. dealerships about possible acquisitions after completing its first store purchase since John Darvish Jr., son of the founder, took over as CEO last year.
The group, based in Maryland, bought a Honda dealership in the Washington area last week, and Darvish, 43, said that deal is just the beginning.
While declining to give details, he said DARCARS is shopping both single-point dealerships and groups in a search that extends across the country.
In March 2014, Darvish took over the company founded by his father, John Darvish Sr. In January, his sister, Tamara Darvish, sued her father over control of the company. Tamara, now 52, had become the face of the company, particularly in the fight to reverse franchise terminations during the General Motors and Chrysler bankruptcies
John Darvish Jr. last week said strong revenue and improved management have resulted in a deep war chest and experienced staff capable of managing newly acquired stores.
“We are definitely in acquisition mode,” he told Automotive News. “We’re studying everything and actively working on acquisition plans.”
DARCARS, headquartered in Silver Spring, Md., now has 17 dealerships. One is in Florida and the rest are in Maryland. It posted revenue of $1.26 billion last year and ranks No. 29 on Automotive News’ list of the top 150 dealership groups based in the U.S., with retail sales of 22,278 new vehicles in 2014.
Last week, DARCARS purchased Honda of Bowie, in Bowie, Md., which sells about 3,000 new and used cars a year. (See Buy/Sell listing, below.) It is expected to contribute $100 million in annual revenue to DARCARS, Darvish said.
Darvish called Honda of Bowie one of the “most well-run operations” he has ever seen.
“We don’t want to change a single person or a single process,” he said. “What I’d like to do is have our management team spend a couple days and learn what they do and take those processes and put them into our other operations.”
The Honda acquisition rounds out DARCARS’ portfolio of brands. DARCARS sells Chrysler, Dodge, Jeep, Ram, Kia, Toyota, Scion, Lexus, Ford, Nissan, Volvo and Volkswagen.
DARCARS has bought few stores over the past 10 years. But when Darvish took over, he said he intended to double the company’s size within five years -- whether through acquisitions or revenue or both.
Darvish said each of the group’s stores has increased market share through the third quarter compared with the year-ago period.
He said: “We’ve basically created an environment where the general manager is running their own business, and whatever they need help with [the corporate team] is at their service.”