LOWELL — Two veteran West Michigan dealership executives have acquired Grand Chrysler Dodge Jeep Ram in Lowell.
According to a statement, Bryan Betten and Chris Baker bought the store from former owner Harvey Koning.
As a result of the deal, Betten-Baker now owns seven dealerships across the region, including Coopersville-based Betten Baker Chevrolet Buick, Muskegon-based Betten Baker Chevrolet Cadillac GMC and Betten Baker Hyundai of Muskegon, among others.
The dealership group is also in the process of acquiring the remaining Grand Auto Family Services Inc. dealerships owned by Koning, which include facilities in Grandville, Allegan and Lowell, but are waiting for manufacturer approval from General Motors, said Pete Ricards, division director at Betten-Baker.
Ricards noted that Betten-Baker purchased the dealership from Koning in a bid to move into the Grand Rapids market and that the company will continue to pursue deals this year.
“We are excited to see the Betten-Baker name continue to grow and serve West Michigan, with this being the first of new locations to come,” Baker said in a statement.
The company is also in the process of acquiring a Big Rapids-based GMC dealership from Gary Trimarco Automotive group, but is waiting on manufacturer approval to complete the transaction, Ricards said.
Betten-Baker plans to take over operations of Grand Chrysler Dodge Jeep Ram immediately.
Terms of the deal were not disclosed.
The deal marks a trend that’s likely to continue in 2017. Both large regional dealership groups and publicly traded conglomerates have ramped up acquisitions in recent years as smaller family-owned companies exit the business, as MiBiz previously reported.
Moreover, strict manufacturer requirements coupled with the large amounts of capital needed to start a dealership have served as a barrier to entry to new startups, leading to a larger pool of deals for large groups as the owners of family dealership retire.
However, deal flow is not limited to the large groups acquiring small dealerships, as consolidation has even taken place among the industry’s larger players. For example, in December McLarty Automotive Group, a Arkansas-based dealership group backed by billionaire George Soros, purchased five dealerships in the state from the Georgia-based Asbury Automotive Group Inc. (NYSE: ABG). The deal reportedly will increase McLarty’s annual revenues to more than $1.4 billion.
Overall, dealership transactions slowed slightly in the first nine months of 2016 to 172 transactions, compared to the 184 transactions during the same period in the prior year, according to the Blue Sky Report, a study published by Irvine, Calif.-based Kerrigan Advisors.
Despite the decrease in deal flow, experts predict M&A activity among dealerships to increase in 2017 driven by a combination of economic activity, increased attention from large investors and private equity groups, and an influx of foreign investment, according to the Kerrigan study.
Editors Note: This story has been updated to reflect comments from Pete Ricards, division director at Betten-Baker.