That same day last week, however, the Cuenes voluntarily closed two Green Bay dealerships and a Hertz rental-car outlet for two weeks to protect hundreds of employees and their families from the coronavirus. Also Saturday, March 28, they closed Broadway Automotive-Manitowoc just four days after taking over the store.
The coronavirus outbreak is expected to chill 2020's buy-sell market, perhaps cutting deals in half from a strong 2019, according to one buy-sell expert.
"For deals that are underway, we're finding that buyers and sellers are still trying to move forward knowing that the closing might be delayed," said Erin Kerrigan, managing director of Kerrigan Advisors, a sell-side company in Irvine, Calif., which reported 233 transactions last year in its Blue Sky Report. "We haven't seen transactions per se fall apart because of the virus."
Several buy-sell experts said deals already far along likely will happen but are delayed because items such as approvals from manufacturers and banks aren't happening now amid the coronavirus pandemic.
"We have about a dozen deals nationally on hold right now," said Dave Cantin, CEO of buy-sell company Dave Cantin Group, adding that none of his clients have canceled buy-sell agreements.
The biggest deals are most at risk in this uncertain environment, said Mark Johnson, president of buy-sell advisory firm MD Johnson Inc. in Enumclaw, Wash.
Last week, Asbury Automotive Group announced it had terminated its $1 billion purchase of most Park Place Dealerships luxury stores in the Dallas and Fort Worth, Texas, markets. The announcement came just days before the deal — expected to be among the largest buy-sells in a decade — had been scheduled to close.
"I think it's simply balance sheet risk," said David Whiston, an analyst with Morningstar. "I think they definitely wanted to make the deal, but there's so much uncertainty now around the rate of recovery and how bad the downturn is from the virus."
Asbury, the nation's seventh-largest new-vehicle retailer, said in a regulatory filing it would pay the sellers a $10 million breakup fee. It also said it borrowed $237 million from a revolving credit line and $110 million from a used-vehicle floorplan loan.
Lithia Motors said late Friday it will delay closing dealership acquisitions until the latter half of the year, according to a government filing. Lithia said it is renegotiating a "meaningful number" of acquisitions but it expects no material termination fees or costs associated with postponing the deals.