New England dealer David Rosenberg structured his latest buy-sell deal with an eye toward surviving changes looming over the auto-retailing model.
He and his former majority partner, Abrams Capital, sold a majority stake in Prime Motor Group to GPB Capital, a New York asset-management company. He wants to leverage GPB's money and scale to prepare for an onslaught of electric cars, autonomous vehicles and ride-sharing, as well as build dealership technology to gain a competitive edge in the shifting retail landscape.
It's not the first time Rosenberg, 54, has taken an unorthodox approach to business. In 2006, Prime Motor Group partnered with Abrams Capital in one of the first private equity-dealership partnerships in recent history. Abrams Capital cashed out of its investment in the dealership group this month.
Most buy-sells are driven by a desire to earn a return on investment, but Rosenberg knew the time had come to devise a deal that ensures a long-term future beyond short-term gains.
"With everything going on in the automotive business today, you need to be super aggressive, have as much scale as possible and be an efficient retailer of automobiles," said Rosenberg. "To do that, you need a lot of capital and a lot of size."Abrams Capital did not respond to repeated requests for comment.
Terms of the GPB deal were not disclosed, but Rosenberg will retain a minority stake in Prime and remain its CEO.