WeatherTech founder purchases first dealership

The founder and CEO of WeatherTech — the manufacturer of floor mats, CupFone and other automotive products — has purchased his first dealership.

David MacNeil, who started WeatherTech in 1989 and formerly was a Mercedes-Benz dealership salesman and has worked for AMG, bought Mercedes-Benz of Billings in Montana. The deal closed on June 30.

"It's a brand that he's very familiar with and very passionate about," said Patrick Womack, dealer principal of the store. "[He] owns quite a few of their products."

The former Rimrock Auto Group dealership was owned by partners John Soares and Steve Zabawa, co-founder of WebBuy, a dealership digital retailing software company.

Womack, president of the 1,400-employee WeatherTech, which is based in Bolingbrook, Ill., and former general manager of AutoNation Inc.'s Laurel BMW of Westmont in Illinois where MacNeil was a customer, said they are investing in the dealership facility. They also are implementing WeatherTech service standards and could see adding other brands down the road, said Womack, former chairman of the BMW National Dealer Forum.

"There's a lot of opportunity here," Womack said. "There's a lot of growth in Montana."Womack said the deal took a long time to close and there were "a lot of hurdles to overcome."

So much so that MacNeil in May filed a lawsuit in Montana federal court against the dealership and Rimrock Auto Group seeking an order for Rimrock to complete "failed and defaulted" obligations in the parties' Jan. 4 asset purchase agreement. The lawsuit also sought damages, plus lawyers' fees and costs.

MacNeil agreed to pay Rimrock $4.9 million for the blue sky value of the dealership.

Blue sky is the intangible value of a dealership, including goodwill.
An appraiser for MacNeil determined a price of $3.5 million for the dealership's real estate, while Rimrock's appraiser came in at more than $6.6 million. Since the appraisals were not within 10 percent, an independent appraiser determined a value of $4 million, according to MacNeil's complaint.

The lawsuit contends that Rimrock wasn't happy with that figure and "Zabawa attempted to improperly influence the independent appraiser to change his valuation." MacNeil also alleged that Rimrock provided "an inflated seller's appraisal of real estate," violating an implied covenant in their contract.

Zabawa told Automotive News last week that he expects the lawsuit soon will be dropped as Rimrock has completed its obligations and the store sold.

"We felt that the way [the appraisal] went down was inaccurate and it wasn't completed correctly, professionally," Zabawa said, adding he just wanted to get correct information to the appraiser.
But Zabawa said he and Soares didn't want to drag the deal out any longer.
"In general, [MacNeil] was paying us a fair price in the overall big picture and so we decided to … move on for the sake of everything," Zabawa said.

Zabawa said he and Soares are dividing up their stores and opted to sell the Mercedes-Benz dealership. The group in June 2020 sold its Chevrolet dealership in Laurel, Mont., to Don Jones, according to the Yellowstone County News.

Rimrock has a Cadillac-GMC store, a Kia-Volkswagen dealership and a Subaru dealership, all in Billings.

Zabawa, 63, said he plans to keep the Subaru store, while Soares will keep the two others. Zabawa also plans to focus on growing WebBuy.

As for his recent buy-sell experience, Zabawa offers this advice: "Just put a number on the real estate" upfront.

George Pero, Alex Covino and Joe Beaver of DCG Acquisitions, a Dave Cantin Group company, handled the transaction.