Starks spoke with Buy-Sell Editor Melissa Burden this month about the decision to sell the dealerships to Asbury. Here are edited excerpts.
Q: Why sell now? Walk us through the conversations you had and the Miller family's thinking.
A: As we started to look at the future, we had really heartfelt conversations with the Miller family [and] with our board of directors. We began with an objective process to look at our positioning within the industry and where we can continue to grow. We then engaged J.P. Morgan to help us think through the macro trends in the industry. We decided to do a market check and that led us to having conversations with Asbury. What it came down to is feeling like we had grown the business about as large as we could without a national footprint and without having an over-the-top digital retail strategy. And [we] concluded that in order to continue to grow and remain [in] a competitive positioning that we've had, that would likely require the investment necessary to accomplish that.
With Asbury, we were so impressed with how our footprints matched up. And then with their digital retailing solution, we were excited because it felt like a really great fit and it would be good for our employees. We like their philosophy and operating model. We like the fact they wanted to retain our structure and leadership team.
What was the time frame of your review and when did you reach out to J.P. Morgan?
We started our internal process at the beginning of this year. In the spring is when we engaged J.P. Morgan.
Digital retail sounds like a big factor in your thinking about making a large investment or looking to exit. Were there roadblocks you discovered? What were those conversations like?
Our stores have been doing digital retailing, and with COVID, it was a catalyst to do more and more of that. What we don't have is a robust platform that plays over the top like an Asbury has. And as we think about the future of the industry, we think customers are going to want to be able to go into the dealership and have the experience they've traditionally had. And then they're going to want to be able to go to a website and have access to inventory from all over the country. Knowing that our footprint was really located in the Western United States, it would have been difficult to have grown to a national footprint, short of going on a large acquisition spree.
Did you consider a buying spree?
We've always had a growth mindset. We added two dealerships to our portfolio last year in Albuquerque, [N.M.], which further strengthened our position in that market. And so we've always been growth oriented. But for the reasons I cited earlier, this felt like a good time to exit.
