A recent transaction that saw a long-time dealership executive re-enter the retail automotive world is an example of how new forms of capital are coming into play in the buy sell sector. It also illustrates the importance of personal relationships in the buy sell world even as the role of consolidators grows.

Pablo Rivers Partners in March acquired Bob Mayberry Hyundai in Monroe, NC from the Walters family. Pablo Rivers Partners is a retail automotive investment group formed by a handful of former dealership executives who are primarily connected from previous jobs.

“We have a nice group, and we have a good group of investors who are very happy with our success at Ford of Clermont,” Charlie Tomm, Pablo River Partner’s chairman and CEO tells Getting to Go!

Its investors include family offices and others. “We are very well capitalized,” he says.

Tomm, 79, entered the retail automotive business when he was 48 after working as a navy diver, earning a law degree, and working as general counsel of a trucking company, among other careers.

In the retail auto sector, Tomm served as CEO of Coggin Automotive Group, CEO of Asbury Automotive Group after it acquired Coggin, and CEO of Brumos Automotive, a Florida-based luxury dealership group.

When Brumos was sold in 2016, Tomm, associates from Brumos, and others formed Pablo River Partners. They acquired Ford of Clermont in December of 2019 but found acquiring more franchises in northeast Florida difficult.

“There was just a ton of competition,” Tomm says. “We found the same person was often outbidding us.”

That person was Larry Morgan. His Morgan Automotive, a large privately held group in Florida, has been on an acquisition spree for the past few years.

Rather than fight Morgan, in 2022, “we asked him if he was interested in buying us and he said he was,” Tomm says. “We worked out it out fairly quickly, and we’ve continued to try to get back into the retail automotive sales and service business ever since.”

An old relationship results in a new acquisition

Pablo River is in contact with all the dealership investment bankers, Tomm says, but George Karolis, president of The Presidio Group, is a long-time friend from their days together at Asbury.

The Presidio Group was representing Ingram and Missy Walters and their family in the sale of Bob Mayberry Hyundai.

Karolis “encouraged the principal there, Ingram Walters to call me,” Tomm says.

He and Walters quickly found “we saw things very much the same, and we came to an understanding,” Tomm says. “It was done relatively quickly for one of these deals.”

That similarity of viewpoints illustrates another critical ingredient in many successful buy sells – personal chemistry. There were other bidders for the Hyundai franchise, Tomm says.

Pablo Rivers’ bid may have been the highest, “but I don’t know,” he says. “We just hit it off extremely well.”

He and his partners visited the Walters in North Carolina around December 11. Ingram Walters and his son and the dealership’s general manager flew down to the Pablo Rivers headquarters in Jacksonville, FL a few days later.

“By late afternoon, we had a deal,” Tomm says.

Taking care of the people

Bob Mayberry Hyundai was an attractive acquisition for several reasons, Tomm says. The franchise, of course, but also the location. Monroe is not a big city, with a population of some 38,000.

But Union County, where it is located, is fast-growing, Tomm says. The dealership has been renamed Hyundai of Union County.

The facility is outdated; investment is needed to make it image compliant. But it has 28,000 sq. ft. of space plus 10 acres of real estate, which was included in the transaction.

The service area has 14 service bays but room for 22 lifts. Adding more bays and lifts will be part of the renovation, Tomm says.

Pablo River Partners will keep the existing staff, including the general manager,

Family-owned dealerships often seek a buyer who will look after their long-term staff and one thing that united Tomm and Walters was Pablo River’s commitment to “take good care of his people,” Tomm says.

That is just good business, he says.

“We feel that with any acquisition the people are the most important part of it,” Tomm says. “We pay above industry norms. That is important because it improves morale and saves money internally. Turnover is extremely expensive. You can’t always find another person, (it costs) a minimum of $15,000 per person regardless of position.”

Pablo River would like the general manager to be part-owner of the business.

“Our desire is for the management to have ownership in the dealership,” Tomm says. “We feel that if they are invested, they have a stake in the game and will be more interested in what is going on.”

No transfers please

Pablo River Partners is looking to acquire more franchises in the southeast, though it stretches that definition a bit to include Texas.

“Our basic rule is we’ll buy anything basically in the southeast, preferably as long as its not more than two airplane rides away with one change of planes,” Tomm says, adding “preferably no change of planes.”

This article was written for Getting to Go, a buy/sell newsletter from Scali Rasmussen.