Auto Canada Enters US

Auto Canada Inc., Canada’s only publicly traded automotive group, announced that it has just agreed to acquire one of the United States’ oldest automotive groups, the Grossinger Auto Group of Chicago, and will be entering the US as part of its growth strategy. The Grossinger Group was founded in 1926 by Sam Grossinger and grew to be one of the country’s largest automotive groups and ranking as high as number 95 on Auto News’ top 150 dealership list in 2015.

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The Grossinger Group will sell a total of 9 dealerships to the Auto Canada group with nameplates that include Toyota, Chevrolet, Cadillac, Honda, Hyundai, Kia, Mercedes Benz, Audi, Subaru, Volkswagen, Volvo and Lincoln. This acquisition will add to the 54 dealerships that Auto Canada Already owns and operates in the Canadian market. While specific terms of the deal were not released, it is estimated that this acquisition by Auto Canada will add approximately $400 million US dollars to its revenue line. The Canadian company recently reported that its Q4 revenues came in at just over $13 million US dollars, which represented an increase of 24 percent year over year, and revenues of $570 million USD which was a 17 percent increase and further saw same store sales rise by just over 10% year over year.

This transaction would be one of the largest acquisitions of a US dealer group by a foreign buyer and while foreign purchasers of domestic dealer groups is not uncommon, most have not resulted in fantastic results. In the 1990’s Chinese group DHC bought a number of dealerships and while the group is still around it is owned by a different company. There have also been groups from the UK who have put their toes in the market, but not to any great extent and not near the size of the Auto Canada deal. More recently a group out of the Netherlands bought into the IndiGO auto group out of Houston, which included 10 dealerships spread around the country.