McLarty Automotive Buys Stores, has Investment from Family Offices

McLarty Automotive Buys Stores, has Investment from Family Offices

October 28, 2015 — The Banks Report has confirmed the McLarty Automotive Group has acquired seven stores selling 16 franchises of the Joe Machens dealership group in Columbia, MO, from owners Gary and Rusty Drewing. Charles Oglesby, the former chairman and CEO of the Asbury Automotive Group, has been named the CEO of the group.

The group is headed by Chairman Mark McLarty and now consists of nine dealerships — one in Jefferson City, MO and seven in Columbia, MO, and one in Little Rock, AR. Paul Hart, previously chief financial officer for the RML Automotive Group (headed by Mark’s brother Franklin McLarty) will serve as vice chairman. Michael Holland, who had been McLarty’s CFO of his Brazilian dealerships, will be the CFO for the group.

McLarty is a fourth generation dealer, and son of Thomas “Mack” McLarty, a longtime Arkansas dealer who became Bill Clinton’s first White House Chief of Staff. Mark recently spent 15 years building dealer groups in China, Mexico and Brazil. He returned to the U.S. in the last couple of years to acquire stores here.

It’s likely the group will be making more acquisitions over the next several months.

According to the Machens website, it’s the largest dealer group in Missouri. The Drewings are keeping their Mercedes Benz and BMW dealerships in Columbia and will rebrand them as Mercedes Benz of Columbia and BMW of Columbia.

Oglesby recently sold the Nissan store in LaGrange that he acquired after retiring from Asbury. His Family Toyota dealership in Burleson, TX, in which he is partnered with Skip Jabbar, is not part of the McLarty group.

Steve Landers Sr. and his son Steve Landers Jr. who had been partners with McLarty in the two Honda stores he acquired over the last year, are not now involved in the group.

In recent months, three family office investment funds have invested in the McLarty Automotive Group: the Soros Fund Management LLC; the family office for the LaFrance family; and the Hunt family office. (The Banks Report 13 months ago predicted the industry would begin seeing Family Offices investing in dealerships.)

Recently, Fremont Private Holdings, the family office for the construction industry’s Bechtel family out of San Francisco, announced it is acquiring Morrie Wagener’s 11-store group in the Minneapolis area.

Meanwhile, the Soros Fund Management investment confirms rumors the last few months that the firm was close to investing in a large dealer group.

The industry has seen a spurt of private equity investment firms over the last two years buying or investing in dealerships. Below are some of the more active firms:

  • The most active firms buying or investing in stores currently are the Jordan Company who partnered with Rick Ford to create RFJ Auto Partners (first reported by The Banks Report in November 2014). RFJ has acquired more than 20 dealerships mainly in tier two markets including a Honda dealership in Missouri and a Toyota dealership in Oklahoma. TBR is hearing that the group is getting ready to close on several more dealerships.
  • A second firm is the New York-based GPB Capital which is helping finance Patrick Dibre’s acquisitions — the most recent being Potamkin’s Honda store in Miami last month. Dibre owns several dealerships from Virginia to New Jersey.
  • A third group, Unique Investment Corp., started by John Makoff, acquired three stores last December. The model is to acquire small stores to provide them with negotiating power and back end consolidation. The firm’s specialty is helping robust small businesses grow.
  • Earlier this year, Taseer Badar, founder of ZT Wealth in Pearland, TX, bought four dealerships in Fort Walton Beach, FL. ZT had been an investor in Alex Rodriguez’s Mercedes Benz dealership in Houston, TX before selling it to Group 1 Automotive late last year.

(There was a sizable private equity play in 2010-2011 to acquire Chrysler stores in California that has since been dismantled — California Superstores. The players were in Miami in July at the National Association of Minority Auto Dealers (NAMAD) annual meeting looking for more dealerships to acquire.)

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