The market for dealership sales and acquisitions in Canada has been buffeted by strong headwinds in the form of high interest rates, inflation and the banking industry’s diminished confidence in the auto retail sector. But by following some basic best practices, both prospective sellers and buyers alike can more effectively navigate the complexities of complicated deals – and create mutually beneficial transactions.
Q: What can a dealership organization do to become a more attractive buyer to an owner looking to sell a dealership? It’s important to note that in any VTB deal, the bank financing the transaction will retain first priority on the collateral. Thus, while VTB arrangements can provide some relief from high interest rates, they must be carefully negotiated to ensure both parties benefit and that the primary lender’s requirements are met.
Ahmad: Several regions across the country present significant opportunities for retailers looking to acquire a dealership. The following regions are ranked in order of the most active markets: Quebec, Ontario, East Coast provinces, Prairie provinces, Alberta and British Columbia.