As we gear up for 2025 and the business environment continues to evolve, join us for a special two-episode series of Up to Speed where we give a holistic viewpoint on 2025 dealership strategies and trending topics surrounding mergers and acquisitions (M&A). Hear from Up to Speed host, Mike Mader, as he sits down with guests Jayson Crouch, Managing director at Haig Partners, Stephen Dietrich, Partner at Holland & Knight, preparing you for a successful year ahead.
Mergers and acquisitions in 2025
The dealership industry experienced significant merger and acquisition activity in 2024, marking it as one of the most active years in history with over 400 dealership transactions. Despite some challenges, brands like Toyota and Lexus continued to perform strongly, while others like Nissan faced difficulties due to inventory issues and lack of incentives. The industry saw a normalization of earnings, with the average dealer netting around $4.1 million, which is still double pre-pandemic levels.
Looking ahead to 2025 dealership strategies, the industry is expected to see continued normalization of earnings and increased buyer confidence, partly due to the pro-business stance of the current administration. More M&A activity is anticipated, with brands such as Toyota, Lexus, Mazda and Kia leading the market. The potential merger between Honda and Nissan, which could create the third-largest original equipment manufacturer (OEM) globally, is also a significant development to watch. Dealers considering selling their dealerships are advised to thoroughly prepare, align stakeholders and engage experienced advisors to navigate the complexities of the M&A process effectively.
Learn more about the current and future state of dealership mergers and acquisitions by watching the full Up to Speed episode, where Baker Tilly’s Mike Mader is joined by Haig Partner’s Jayson Crouch:
Legal aspects of mergers and acquisitions
Within the dealer buy-sell market, partial deals have gained increased prevalence. This is where groups sell only some of their dealerships or sell different parts to different buyers, a trend driven by the desire to maximize value, geographic considerations or limit the impact on human capital. Key issues in partial deals include handling common employees, financing implications and vendor contracts. Early planning and thorough preparation are crucial to navigating these complexities effectively.
Challenges posed by self-insured health plans in these dealership transactions must also be considered. Buyers need to be aware of the risks associated with taking on COBRA obligations and the potential impact on their insurance costs, while also ensuring detailed due diligence and understanding of HIPAA regulations. There are several 2025 dealership strategies sellers can use to protect themselves from post-sale lawsuits, such as thorough disclosure, cleaning up operations and considering tail insurance policies. The right of first refusal (ROFR) by manufacturers can also pose challenges, there are many ways sellers can mitigate the risk of their deals being disrupted by ROFRs.
Get a more in-depth look at these important aspects of a deal in the full Up to Speed episode, where Baker Tilly’s Mike Mader sits down with Holland & Knight’s Stephen Dietrich:
Watch more Up to Speed episodes
Up to Speed, a video series from Baker Tilly, discusses hot topics in the dealerships industry. This series, hosted by Mike Mader, Principal and leader of Baker Tilly’s dealership consulting service team, meets with experts and other dealerships industry leaders to discuss issues pertinent to the industry. New videos are published the third Wednesday of every month.
Dealership succession planning
Explore the critical aspects of dealership succession planning in this insightful episode of Up to Speed. Learn strategies to maximize estate tax exemptions, manage leadership transitions and ensure manufacturer approval. Discover how to balance financial security with preparing the next generation for leadership.
Tax policy and the 2024 election
In this Up to Speed episode, Baker Tilly’s Mike Mader and Kasey Pittman explore potential post-election tax policy changes and their impact on dealerships. Learn about 2025 tax sunsets, party stances and how dealerships can prepare for uncertainties.
Insights into dealership banking
In this month’s episode of Up to Speed, Mike Mader, principal with Baker Tilly’s dealerships team, and Jason Smith, Executive Vice President and Head of Dealer Commercial Services at Truist, provide insight into the financial side of mergers and acquisitions for dealerships
The real estate side of mergers and acquisitions
In this episode of Up to Speed, Mike Mader, Principal with Baker Tilly’s dealerships team, and Dan Garces, President and COO at Capital Automotive, discuss the real estate complexities dealerships should consider when conducting a merger or acquisition.
Reinsurance for dealerships
Explore the fundamentals of dealership reinsurance with Mike Mader and Mark Baran in this month’s episode of Up to Speed. Learn about entity types, risks, third-party involvement, dealer protections and updates for F&I participation programs.
How dealerships should respond to the CDK Global data breach
In this special edition episode of Up to Speed, Mike Mader, principal with Baker Tilly’s dealerships team, is joined by Nick Goodman, Matt Gilbert, and Tom Garvey to discuss the CDK Global data breach that occurred on June 19 and what dealerships should do in response to the incident when it comes to accounting and reporting, cybersecurity and insurance.
Salary exemption rule changes
In this episode of Up to Speed, Mike Mader, Principal with Baker Tilly’s dealerships team, and Tim Scott, attorney at law at Fisher & Phillips LLP, discuss changes to the Department of Labor’s salary exemption rules that take effect on July 1st and how these changes affect dealerships.
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