"Our philosophy has been stay under the radar, but when people hear 'private equity [is] buying dealerships,' they think we have deep pockets, that we will buy anything and we'll overpay," Naugle told Automotive News. "We're very discretionary buyers. We don't buy turnaround stores. We like to keep the owner involved. We're at that point where people know who we are, but we want them to understand who we are."
GPB Capital manages $1.2 billion in assets. Its automotive team has industry veterans including former dealers, whom Naugle declined to name. Naugle, a certified public accountant by trade, spent 20 years with Holman Automotive Group in financial positions. Then he worked at DCH Auto Group as director of corporate finance and accounting for one year before Lithia bought it in 2014.
"We're not Wall Street people at GPB Automotive. We are retailers," said Naugle. "That's our pedigree."
That helped persuade Jimmy Ross to sell the majority stake of the group his father started in 1954. "They have people familiar with the car business, so they're easy to talk to and flexible," said Ross, former chairman of Kenny Ross Auto and now managing member.
Terms of the deal were not disclosed. But GPB's deals usually require the seller to retain a 15 to 25 percent stake and keep running the business, Naugle said. The name on the building doesn't change.
"When we go into these deals, we don't expect to buy anyone out," Naugle said. "Our philosophy is they've created something special, special enough for us to buy them, so why would we want to get rid of them?"
GPB's dealerships are concentrated in the New York metro area, including Bill Kolb Jr. Subaru in Orangeburg; Rockville Centre GMC; and Nissan of Garden City. It also owns the FX Caprara group, with seven stores in northern New York state; World Jeep-Chrysler-Dodge-Ram in Shrewsbury, N.J.; and World Subaru in Tinton Falls, N.J., Ron Carter Auto Group in Alvin, Texas, and stores in California, Pennsylvania and Connecticut.