After buying three Fort Walton Beach, Fla., dealerships five years ago to enter auto retail, ZT Motors has big expansion plans.
ZT Corporate, the wealth management firm that paid $80 million for the former Quality Motors stores, now is seeking to buy up to 20 Southeast U.S. dealerships by 2023 as it aims to double pretax earnings to $30 million or more.
Growth has been atop Taseer Badar's mind since acquiring Toyota and Mazda dealerships and a Mercedes-Benz-BMW store in January 2015.
Badar, CEO of ZT Corporate — the rebranded name for ZT Wealth — said new management helped double pretax earnings at the three Fort Walton Beach stores in five years. And last fall, ZT Corporate's ZT Motors unit made its first big acquisition, buying Steve Rayman Chevrolet in Marietta, Ga., a store that dates to 1985 and is among the top-performing Chevy dealerships in its market.
"We looked at 40 deals before we did one," said Badar, who said he couldn't disclose the purchase price because of a confidentiality agreement with Rayman.
Badar said ZT Motors scoured potential acquisitions for a year and a half before making the Rayman deal. That transaction has sparked interest among dealership sellers, including from some of the public auto retailers such as Sonic Automotive Inc., he said.
"The Atlanta dealership really put us on the map," Badar said.
Badar said acquisition opportunities have emerged in the suburbs of Atlanta, which could help ZT Motors with scale and reduce costs.
While nothing is under contract, his team is reviewing 10 to 12 possible deals, as ZT Motors aims to grow in areas such as Atlanta and Houston, where ZT Corporate is based. Badar said some of the proposals include other General Motors stores, some within the Atlanta area. ZT Motors also wants to add brands such as Ford, Lexus and Honda.
"I'd love to be from Atlanta to Houston eventually," Badar said, adding that some public companies have approached ZT Motors, looking to sell certain stores in more rural areas outside Houston.