Inside Automotive with Jim Fitzpatrick, powered by CBT News

Hot Franchises and Market Moves: A Dealer's Guide to M&A

• Jim Fitzpatrick • Season 1 • Episode 6

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Dave Cantin, President and CEO of the Dave Cantin Group, shares insights on the current state of automotive buy-sell activity and how dealers are approaching strategic acquisitions. Despite macroeconomic headwinds, the dealership M&A market remains incredibly strong with valuations holding firm and even climbing for certain franchises in prime locations.

• DCG has closed multiple deals recently, including a highly sought-after Subaru dealership in Northern California
• Most franchises have strong demand when they're in good locations with solid performance metrics
• Toyota, BMW, and Land Rover remain hot franchises despite challenges like tariffs
• Today's buyers are making more sophisticated, strategic acquisition decisions
• Jump IQ platform provides comprehensive data analysis of all 18,000 new car dealership rooftops
• The tool offers benchmarking capabilities across 40 KPIs and detailed valuation assessments
• Stellantis shows promise for recovery under new leadership, while Nissan remains challenging
• The best time to sell depends on individual circumstances, not just market conditions
• Underperforming stores often distract dealers from their better-performing assets
• Dealers excel at reacting to challenges but could benefit from more proactive planning

If you're considering buying or selling a dealership, contact the Dave Cantin Group to learn how their data-driven approach and market intelligence can help you make strategic decisions that align with your long-term goals.


Jim Fitzpatrick:

Welcome to Inside Automotive with Jim Fitzpatrick. Hey everyone, Jim Fitzpatrick, welcome in this morning to another edition of Inside Automotive, right here at the CBT News Network. With his finger on the pulse of the buy-sell market Today we are joined by Dave Cantin, who is the president and CEO of the Dave Cantin Group, to share what's hot, what's not, and how industry shifts out there. From EV policy to franchise, performance may impact dealers' decisions today. So, Dave, thank you so much for taking the time out of your busy schedule there to join us on the show.

Dave Cantin:

Jim, it's always a pleasure. Thanks for having me on and I hope you're doing great.

Jim Fitzpatrick:

Well, I'm doing great, and it sounds like you're doing pretty great too, because my notes tell me here that you just had two incredible closings there in California. Talk to us about that.

Dave Cantin:

Look, it's been definitely an active start to the summer at DCG. We're coming off two closings in one single week. Coming off two closings in one single week, one in California, one Subaru closing as we speak right now and our deal pipeline is probably the strongest we've seen in years.

Jim Fitzpatrick:

Wow, that's fantastic. But, Dave, don't you know that there's tariffs out there and there's high interest rates and there's gas prices and all these things are going on. How could you be doing this right now?

Dave Cantin:

You know, Jim, it's really about the advisory role Dealers are understanding more than ever today, the opportunity right. Dealers that are in this for the long haul that aren't looking at this as a how do we buy something or tuck in an asset or an investment for a short period of time, dealers that are in this that are going to be in the industry for decades and generations to follow don't look at an acquisition as brick and mortar. They look at it as an asset and that asset is long-term. And if this is a good time and an opportunity to add in great assets, then this is the time that you do it. And there's a lot of dealers that are sitting there and they're really looking at where can we grow, what geographic areas and how can we enhance and evolve in what we're doing today.

Jim Fitzpatrick:

Yeah, speaking of a great asset, one of those stores was the Subaru store. Talk to us about that. They are just an incredible franchise to have. So many dealers want a Subaru store. So talk to us about that.

Dave Cantin:

Look, Subaru has really climbed that ladder, as we've all seen it's doing really well. It's one of our top dealers and franchises in demand, always geographically, no matter where it's located. This is a beautiful grand of a dealership in California, in Northern California, very excited for the buyers buying the dealership. It's a great opportunity for them. They're going to do really well.

Jim Fitzpatrick:

And so talk to us about maybe some of the rest of the hot franchises that are out there right now, in addition to Subaru.

Dave Cantin:

Yeah, look. I mean, as we all know, everybody wants a Toyota store. Nobody's not going to ever say I don't want a Toyota dealership, but Toyota is doing really well. BMW is doing really well. You look at brands. You know, even at this point we have a lot of demand on Land Rover still with everything that's going on with the tariffs, it's doing really well. Land Rovers still with everything that's going on with the tariffs, it's doing really well. There's just a lot of strength right now.

Dave Cantin:

I would say that, as of right now, with all the deals that we have out there that are performing and that are on market, we're really other than you know. There's just a few brands where dealers will say we really don't want them. Everything right now is kind of up for grabs, based upon where it's located, how it's performing, where there's upside, how the sales performance metrics are performing. You know dealers are really strategically looking at today and they're more sophisticated today. You know where's the opportunity for the store, is there growth potential? Do I have somebody? Do I have someone who I could put into this dealership and have it do better than it's doing today? Or could I provide resources to this dealership that the dealer doesn't have today that allows that dealership to perform better than it is.

Jim Fitzpatrick:

Right, right, right. Talk to us about the overall state of the market today. I mean, from a kind of a macro perspective, what is the take? I mean, if a dealer is listening I shouldn't say if a dealer, but thousands of dealers are listening right now and they're wondering what? From your perspective, what is the state of the market?

Dave Cantin:

Sure, look, I would say. Despite macroeconomic headwinds, dealership M&A remains incredibly strong. Valuations are holding, in some cases climbing even, depending upon as we just talked about certain franchises. The franchises that have high demand based upon the location and the opportunity of that store are even climbing in some areas.

Jim Fitzpatrick:

Wow, that's fantastic, and you guys have got an incredible pipeline of deals that are waiting to close in the coming months.

Dave Cantin:

right, look, we're seeing not just volume, Of course, there is a lot of volume going on. We do have deals in the coming months, right? Look, we're seeing not just volume, Of course, there is a lot of volume going on. We do have deals in the pipeline. We've been working, as you know, an acquisition takes anywhere from the best case scenario, four months all the way out to six or seven months to close. So our pipeline we're already working into kind of 26. It's funny because you know, when we have these company meetings we're already talking 2026 and it's, you know, June 2025.

Dave Cantin:

Right, but a pipeline of an acquisition takes anywhere from four to seven months, and what we're seeing right now are all the acquisitions that we were working in the beginning of the year Q4, that are now coming to fruition, that are now closing the pipeline. Strong Q1, as we all know, is pretty strong in the industry. Dealers made a lot of money, Dealers have a lot of money to spend and what we're seeing that's really promising is they want to keep investing that back into the automotive industry. So that's promising.

Jim Fitzpatrick:

Yeah, you guys are a little bit different at DCG. Talk to us about that. What's the real differentiator between you and some of the other companies in the space?

Dave Cantin:

Yeah, look, we spend a lot of time advising our clients. You know that's really. It's not just buying for DCG, it's the strategic activity and the approach that we take. In the industry. Buyers are being way more selective, sellers are being way more sophisticated and our advisory or role, utilizing our market intelligence jump, iq is what separates us from the competition, is what separates us from the competition.

Dave Cantin:

We spend a lot of time with our clients, sitting with the dealers and their teams, utilizing our market intelligence to help them strategically approach the market, whether it's divesting of an asset that's not performing well so they can take that and reinvest in an asset that might do better for them, or strategically approaching the market to buy new assets, buy dealerships that would fit their portfolio as tuck-in opportunities. So we're spending a lot of time sitting with our clients when we're even not considering an acquisition or divestiture, but maybe it's benchmarking, seeing how their stores are doing versus the competition internally or externally. So we spend a lot of our time in the company advising our clients, spending time with our clients and it's not just about Jim, sourcing or selling an acquisition, that just happens when you're doing the right thing and advising your clients.

Jim Fitzpatrick:

Yeah, sure, sure. So you're right there, helping them to run their dealerships better each day and maybe, when the time comes for them to sell, they sell or maybe they buy. But you're really in the trenches with them, right.

Dave Cantin:

It's our job to ensure that the clients that we represent are maximizing their performance, doing the best they can and, most importantly, they know what's going on, Because it's like anything else. Data is so critically important in any industry, in any sector, and if you don't have the data, you just don't know. Well, we have the data. Jump IQ provides the data that allows our dealers to really put their thumb on the pulse, to understand where they are versus their competition internally and externally. And our clients are loving the ability to leverage Jump IQ with DCG and it's absolutely amazing. And again, you know we're almost four years in this product phase and beta phase of building junk and we've really enjoyed sharing it with our clients. And they just can't get enough of it.

Dave Cantin:

And I'm not out here pitching it today. I'm telling you that's what we're doing every day of the week. That's what's allowing our pipeline on the M&A side to really take off, Because we have dealers looking at this going, hey, I want a Porsche store and we pull up every Porsche store. I'm like I want that one. And when you're able to critique your strategic approach and narrow it down to exactly what you're looking for in certain markets, it makes it that much stronger. We're really loving what we're doing, we're excited about it. We're not sitting back waiting for our phone to ring. We're out there in the trenches with these dealers, with their teams, helping them create the most amount of opportunity possible within their stores.

Jim Fitzpatrick:

For the dealers that are out there because we've talked about it before, about Jump IQ kind of give us the elevator pitch, if you will. What is that all about? I mean, it's very, very impressive. But for the dealers that aren't as familiar with it as we are, talk to us about that.

Dave Cantin:

Yeah, wow, that's a lot more than we have time in this one segment it does so much right.

Dave Cantin:

I mean again almost four years since the inception of creating Jump. Jump has its own dedicated team of about 15 individuals. It's led by our chief artificial intelligence officer, bruce Malloy. We've mapped out all 18,000 rooftops and we could utilize it several ways. Okay, benchmarking is a huge is a huge added value to what we do at Jump IQ. We could sit with any dealership, pull up their 10 dealerships and we can map out their 10 stores versus any dealership within a mile or 3,000 miles away and we can basically walk them through.

Dave Cantin:

40 points of data, 40 KPIs about their stores are performing versus the competition and again, this is close to real time, so you don't have to sit back and wait for it to get that information 90 days out. You know this is in real time. How are your dealerships performing against your own stores or against any other competitive make? Okay, a mile away or 3,000 miles away, and you know you could pull up. You could pull up a group 1,500 miles away that has similar brands or different brands and see how you're competing. So it's great for benchmarking, just to know how you're performing.

Dave Cantin:

Then the strategic approach of what we do as far as M&A is unbelievable, because this was built as an evaluation tool so we could pull up a full-blown evaluation on any single of the 18,000 new car dealerships 45-plus pages of a Wall Street evaluation.

Dave Cantin:

That's going to give you all the information on the demographics, all the information on the dealership performance, all the KPIs. It's going to tell you a score range. It's not just going to give you a blue sky multiple. It's going to narrow down why that blue sky multiple is what it is based upon geographic location, based upon if it's imaged, based upon upside potential, based upon all the KPI measurements. So it's not just going to say Toyota trades at a certain amount because it's Toyota. It's going to tell you exactly why Toyota is trading for that amount in that location, as the dealership is owned or leased, if it's imaged or not, if it's performing above or below expectations. And it narrows it down so a dealer can see exactly what their enterprise value is and help them strategically approach if they're acquiring the business. So our evaluation tool is key. It's unbelievable. Like I said, we're still in beta phase almost four years later and we're sharing it with our clients. Over the last six months We've shared it with some of the largest dealer groups and they're blown away.

Jim Fitzpatrick:

I can imagine.

Dave Cantin:

It's a real special tool that we're proud to have.

Jim Fitzpatrick:

That's the kind of data that, if I were a dealer again, I would want at my fingertips anyway, even if I wasn't thinking about selling or acquiring another store. That kind of data would be very valuable to me.

Dave Cantin:

Well, it's most important if you want to operate your business to its maximum performance, right? If you really want to know what you're doing versus what all the other dealers are doing, and how you can out-compete them and how you can out-perform them, you need real-time data. You need data that's able to provide you so you can question everything you're doing. Look, if you're not questioning everything you're doing, then you're not doing it Challenge franchises that are out there.

Jim Fitzpatrick:

Talk to us about that. I know that Stellantis was on that list. However, now, with the new leadership in place, the Stellantis dealers that I talked to are feeling pretty good about the future. Obviously, those are iconic brands in Ram and Jeep and such, but talk to us about that. And then, of course, we'd be remiss if we didn't mention Nissan as well.

Dave Cantin:

Of course. Look, I think the jury's still out on Stellantis. Right Dealers want a clear roadmap, not just restructuring. You know culture change at the top takes time in any business. Right, the network is watching, you know, whether a TV policy, franchise strategy or strategic growth to M&A activity, you know, I think it's all just time right. You know Stellantis has been a powerhouse for decades. Yeah, ok, jeep's not going away. I just think it's going to take time for this culture change. It's going to take time to really get a clear road map.

Dave Cantin:

But, you're right, the excitement is real. I speak to my clients every day that have a ton of you know Stellantis dealerships. I remember the day and it doesn't feel like it was that long ago where you know dealers would call me and say, hey, what do you got in the Stalantis you know in the, in the, in the cheap market, right? Yes, it's. It's just I know it's going to come back and, if anything, it's probably a good buy right now.

Jim Fitzpatrick:

Yeah, yeah, I would, I would agree. Now, that might not be the case with Nissan.

Dave Cantin:

Yeah, look. I would advise our clients right now that Stellantis, in the right market with the right opportunity, is probably not a bad investment. Ok, it's going to bounce back. The leadership is kind of demonstrating that they're not going to allow this brand to go away. They're going to be fully dedicated and committed to bringing Stellantis back to the top of where it has the ability to perform.

Dave Cantin:

Nissan now is still in the middle of a major reset. Some markets are more bullish than others. We're watching a TCG very closely of this alignment, but I'll tell you right now, or this realignment, I should say I would still be very worried to invest in a Nissan dealership right now. Based upon what we're hearing and seeing. We do believe that it has huge opportunity. It makes great cars. You know the brand is. You know they need some new inventory, obviously, as we all know, but they just look. I feel like it's been a decade and a half where they just can't get it right and they need to figure that out as quickly as possible. You know like we talk about every day in the world how there's all this uncertainty. Well, when has Nissan had certainty?

Dave Cantin:

That's the question they need to create certainty at the dealer level the consumer level. If the dealers believe in the leadership at Nissan and if the dealers believe in the product, the future product lineup at Nissan, it's going to make it even better for the internal staff to believe there's a great future ahead. They need to do a better job of instilling certainty within their dealers.

Jim Fitzpatrick:

Yeah, and they brought in new leadership at Nissan. But to your point, it takes a while and it has been a challenged franchise, to say the least. But maybe they can pull it out. I don't know, that's a tough one, right.

Dave Cantin:

It is definitely one of the tougher franchises that pops up on the list and look, we're rooting for them all. We want to see everyone thrive.

Dave Cantin:

That's our goal at TCG. A lot of dealers have Nissan that have been in business for a very long time and they want to see nothing more than Nissan bounce back Right. So I just look. We leave it in the hands of the executives at the manufacturer to figure it out. Build that culture, create the programs necessary to create certainty at the dealer body and bring the consumer's product that they want to buy.

Jim Fitzpatrick:

Yeah, that's it, that's right, that's right. So for dealers listening, it's a good time to sell and get top dollar for your store.

Dave Cantin:

You know, Jim, that's. That's always a question that a lot of people ask Is it a good time? There's so many different elements that goes into that question, right? That's kind of succession planning Is it a good time?

Jim Fitzpatrick:

What does?

Dave Cantin:

that mean you know, look, if we're investing on Wall Street, if you bought it low and you could sell it high, great right.

Dave Cantin:

But it all really depends on the dynamic of what your business plan is, what the future plan is for your family, for the business, for the culture in your business.

Dave Cantin:

Future plans for your family, for the business, for the culture in your business. You know, if you have a store that is a distraction and you're putting more time into a dealership that's not performing the way it should and that's taking you away from other areas and elements of your business, yes, divest of that acquisition and take that money and reinvest it in another asset in the automotive industry that you could perform better in, no different than if you were looking at your stock portfolio, your wealth management portfolio, and 13% of it was not doing good. Your wealth management advisor is going to sit there and say we're going to divest of this 13% and reinvest it in other areas, no different than in car dealerships. You want to make sure that your portfolio is performing and most of the time and the funniest part about this is every dealer typically has a wealth management advisor and they listen to them with this strategic advice every day.

Dave Cantin:

But then when they think about it on their way of operating in the industry and they look at performing assets and not performing assets, it takes the first time for them to actually follow the same trend of what they've done for decades, investing their family's wealth in their business. And once they do it, they're like wow, why didn't I divest of that asset?

Jim Fitzpatrick:

years ago.

Dave Cantin:

I feel like I'm free. I feel like I have bricks, because what you don't realize is the stores that are performing really well typically don't need the dealer's attention. The stores that are performing not so well are distractions. They take up more of their time and guess what? It doesn't mean that that store doesn't have the ability to perform. It just means maybe it's not the right fit for that auto group and somebody else can do a better job with it. And the value is still there.

Dave Cantin:

So when you say, is it a good time to sell, it really depends on the situation. If it's a non-performing asset, if it's not performing the way you expect it to, yes, if you could do so well on an asset and take a lot of money off the table, that's going to put your family in a much more comfortable situation for generations to follow. Yes, it's a great investment, no different than if you bought Apple at five dollars and sold it today. Or if you bought Bitcoin at one hundred dollars and sold it today. Right, it's a great investment. Nobody's going to say that's a bad investment if you sold it Right. So it really depends on what the future holds for you. And then you know.

Dave Cantin:

The biggest question is is it a good time to buy? Yeah, that's the question. Is it a good time to sell? I think it's. I think right now we use one word it's opportunity. There's a lot of opportunity today that you could tuck in some great, some great acquisitions. You asked me at the beginning of this conversation about what are the great brands out there to buy. You know, and I hesitated, because there's really not a horrible brand. I mean, we could talk about some of the ones we just mentioned before that wouldn't be anywhere up of our list. But it's not so much the brand, it's more about what, what, what do you have as far as infrastructure that you can then take that theme and grow into other markets and grow into other franchises and create that, and create that true portfolio that gives you a mix of different franchises in different markets, that allows your, that allows your enterprise value of your group to really skyrise.

Jim Fitzpatrick:

Right, right. You've got to be one of the most enthusiastic individuals about the car business and the most positive that I speak to. Is there anything at all that keeps you up at night about our industry, that we're in?

Dave Cantin:

Jim, I don't know if I sleep much at night. I mean, it's kind of funny. My wife makes fun of me all the time. I wake up with this energy, I go to bed with this energy and I probably have this energy that says why I'm sleeping.

Dave Cantin:

That's why my body's going like this. You asked me what keeps me up in the industry and where my mind is all the time. You know when we, when we talk about an industry that we all deeply love. We have a passion for the automotive industry. You know. It's the level of uncertainty right. Consumer demand still seems pretty strong right now.

Jim Fitzpatrick:

Yeah.

Dave Cantin:

The tariffs were, covid was a scare, the financial crisis was a scared and guess what? Something else eventually is going to happen. So what keeps me up at night are dealers just being more proactive. You know, we've learned through all of these scenarios that took place over the last you know call it 15 years. Dealers are incredibly at reacting and having resilience to bounce back quick.

Dave Cantin:

What they're not the greatest at is being proactive succession planning, putting the right pieces in place for when and if that event happens, not just if it happens, and I'll say this I've never met a group of, I've never met a group of entrepreneurs that could react as quickly as dealers. They're unbelievable. But if they had a little bit more of a proactive approach, it would take a little bit of ease away as well in that reactive approach. So that's probably what keeps me up.

Jim Fitzpatrick:

Very, very good point. Very good point. Dave Canton, president and CEO of the Dave Canton Group, thank you so much for all the time you've given us here at CBT News. We very much appreciate it. I know that our dealer community that watches each day will get a lot out of your visit.

Dave Cantin:

So thanks so much community that watches each day will get a lot out of your visit. So thanks so much. Ben thanks for having me on.

Jim Fitzpatrick:

I look forward to speaking with you again soon. We'll buy eight sleep. There you go. Thanks for watching Inside Automotive with Jim Fitzpatrick.