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Mid-Year 2013

DEAL ACTIVITY CONTINUES TO RISE

1 OVERVIEW

3 TRENDS IN THE US AUTO INDUSTRY

5 DEALERSHIP PERFORMANCE TRENDS

7 BUY-SELL TRENDS

8 FRANCHISE VALUATION RANGES

10 SUMMARY

In This Issue

AUTOMOTIVE RETAIL

BUY-SELL REPORT

Presidio is a leading advisor to sellers and buyers of high-value auto dealerships and dealership groups across the US. Since 1997, our professionals have completed over 150 transactions totaling more than $4.5 billion of value in the automotive sector. Presidio combines automotive experience with traditional investment banking capabilities to provide a compre-hensive level of buy-sell advisory services to dealers. Presidio’s Automotive Services is a part of Presidio Merchant Partners LLC, a member of FINRA.

Learn more at www.presidioautomotive.com

The Presidio Group is a corporate and personal financial services firm with inter-connecting business units including Investment Banking, Wealth Advisory, and Private Equity. Our investment banking services advise the following industries: automotive retail, automotive technology and services, software and business services, and cloud computing.

Learn more at : www.thepresidiogroupllc.com

Contact US Alan Haig Head of Automotive Services (954) 646-8921 [email protected]

Erin Kerrigan (949) 439-6768 [email protected]

About Us

OVERVIEW

Buy-Sell Activity Is Trending Upward. There was a significant jump in the number of pri-vate buy-sells announced in the first half of 2013 compared to the first half of 2012. While pricing data is not available for these transac-tions that were reported to Automotive News, we assume that the value paid for dealerships by private buyers has increased sharply from the same period in 2012.

Through June, public companies spent $133M on dealership acquisitions in the US, up 8% from the same period in 2012. As shown in the table below, acquisition spending in the US has been a bit uneven, with a spike in closings at the end of 2012, perhaps for tax reasons, which may have pulled forward transactions from the first quarter of 2013. Second quarter spending was strong.

When international activity is included, public company spending on acquisitions is up 17% from $325M in the first half of 2012 to $381M in the first half of 2013. If this pace continues, the public retailers are on track to return to 2007 spending levels, albeit with a much heavier weight toward international acquisitions.

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$100M

$200M

$300M

$400M

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Quarterly US Buy-Sell Activity By Publics

2012 2013Source: Corporate SEC Filings, Presidio Estimates

$1,047M

$394M

$773M $622M

$283M $20M $211M

$500M $502M

$123M $133M

$150M

$194M

$158M

$10M

$12M

$3M

$12M $224M

$202M $248M

$-

$200M

$400M

$600M

$800M

$1,000M

$1,200M

2004 2005 2006 2007 2008 2009 2010 2011 2012 H1 2012 H1 2013

Public Company Acquisition Spending

US Acquisitions International Acquisitions

Source: Corporate SEC Filings, Presidio Estimates

1st Half Spending Grew 17%

10

26

0

10

20

30

H1 2012 H1 2013

Private Buy-Sell Announcements

Source: Automotive News

International Acquisition Activity Remains Strong. Group 1 and Penske are spending hundreds of millions of dollars on acquisitions abroad. US dealers might have mixed feelings about this diversion of capital. Sellers would prefer these deep pocketed buy-ers invest their money here as it would likely boost dealership prices, but other buyers probably welcome the international push by Penske and Group 1 as it means less com-petition for dealerships in the US.

Private Buyers Are Active in High Value Dealership Sales. There were several transac-tions that closed in 2012 where private buyers paid in excess of $50M. Presidio is in-volved in two transactions expected to close in August with private buyers that aver-age about $50M. What is even more remarkable is the number of private dealership groups that have told us they are seeking acquisitions over $100M, previously the do-main of the public companies. This trend means that it is now easier for larger groups to exit when their owners are ready to retire.

Dealership Acquisitions Provide a High Return On Investment. Dealership acquisitions appear to provide superior returns to other investment opportunities. In the table be-low, we compare the returns a dealer could achieve by acquiring a low multiple fran-chise like Chevrolet and a high multiple franchise like BMW to the estimated returns available in today’s low-yield environment. Our basic analysis assumes $1M profit for each dealership divided by the sum of blue sky ($7.5M for BMW and $3.0M for Chevy) and $1.5M in other assets for each dealership. No value is given for the potential ap-preciation in value of the dealerships, although we think this is likely over the long term. It is easy to see why dealers are seeking acquisitions and also why many dealers who are at retirement age are holding onto their stores longer than they had planned.

Dealership Values Are at High Levels. Values are high today for a number of reasons.

Profits for many dealerships are at record levels, leading to higher prices. There is a lack of dealerships available for sale compared to the level of de-

mand. Many owners are retaining their businesses past retirement age. Buyers have excess capital and are willing to pay premium prices to acquire

dealerships since they are earning little on their cash in the bank. Lenders are offering very attractive acquisition financing terms. Buyers see less risk as the economy is likely to grow for the foreseeable future.

Economics 101 is in effect in the buy-sell market: rising demand without rising supply leads to rising prices. While it is a seller’s Market, we are sympathetic with buyers who are willing to pay strong prices in order to get the high returns offered in our industry.

Are Dealership Values Nearing Their Peak? NADA data shows that the average dealer-ship profit for the 12 months ended May 2013 increased only 1% from the year ended 2012. The stock price index of the public retailers has been flat in the second quarter of 2013. Both of these data points indicate that the big jumps in profits for retailers may be coming to an end. As the growth in auto sales slows, it is possible that the

2.5% 2.7% 3.3%

7.5% 8.3%11.1%

22.2%

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EstimatedDealership Floor

Plan

10 YearTreasury

Bond

US InvestmentGrade Bonds

EstimatedDealership RealEstate Cap Rate

S&P 20 YrAverageReturn

EstimatedAutomotiveDealership

ReturnsSource: Bloomberg, Capital IQ, Presidio Estimates

Est. Chevrolet ROI

Est. BMW ROI

Dealership acquisitions

provide a compelling

return on investment,

even at high multiples

growth in dealership values that we have enjoyed since 2009 will also start to level off. The closer we come to a peak sales rate, the more likely buyers are to reduce the multiples they will pay. Note this trend is appearing in the Price/Earnings multiples of the public retailers as shown in the chart at left. So far, we have not yet seen any fall in the multiples paid for private dealerships since the supply of dealerships for sale is still low compared to the level of demand. But if dealership earnings begin to fall, or the supply of stores available for sale increases, or both, then we would ex-pect to see a decline in multiples and therefore a decline in dealership values.

The Presidio Multiples. The chart below sets forth our estimates for the multiples of current adjusted pre-tax profit that buyers would pay for the goodwill (blue sky) of dealerships in 2013. Blue sky multiples appear to be stable or up slightly for most franchises from the end of 2012, perhaps near their peak for this economic cycle. Actual multiples could vary significantly from these figures due to unique characteris-tics of each buy/sell. The team at Presidio has been involved in the purchase or sale of hundreds of dealerships and understands how various factors will influence a dealership’s market value. We caution readers not to take these multiples and apply them to their statements to estimate their blue sky value. Also, Presidio completes a great deal of analysis for its clients to properly calculate their profits, ensuring that all adjustments are included and accurate, in order to calculate potential blue sky values. This analysis is one reason clients retain Presidio to represent them—to make sure they are showing the correct amount of profit. If sellers understate profits, they will sell too low. If sellers overstate profits, they run a high risk of the transaction falling apart in due diligence, or bringing a lawsuit post-closing. We dis-cuss the multiples in greater detail on page 8.

TRENDS THAT IMPACT THE US AUTO INDUSTRY

The Economy Continues to Improve – Slowly. As of July, unemployment was 7.4%, which is lower by 0.3% from when our last report was issued in April 2013. However, the Labor Participation Rate remains remarkably weak at just 63.4%, equal to the rate back in 1979. The Consumer Confidence Index reached 80.3 in July, up nicely from April and nearing the 90 level which indicates a strong economy.

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The Presidio Multiples

Increased DeclinedSteady

Change From Prior Report

Source: Presidio Estimates

Blue sky multiples are

stable or slightly higher

for most franchises

Price to Earnings Multiple = Share

Price / (Net Income from Continuing

Operations / Shares Outstanding)

12.0x

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2010 2011 2012 Jun-2013

Price to Earnings Multiples*

Public Auto Retailers S&P 500

Source: Capital IQ

GDP grew at a 1.7% annualized rate in Q2 after growing at just 1.1% in Q1 and nearly zero growth in Q4 2012. This increasing growth is a positive trend, but much lower than many economists would have predicted at this point in the recovery. Some economists believe consumers and businesses are still wary of spending given the gridlock in Washington, higher taxes, Federal budget cuts and unknown impact of the Affordable Care Act. Predic-tions for GDP growth are positive for the second half of 2013, which should help propel auto sales to their fourth consecutive year of higher sales. Improved Credit Terms and Availability. Interest rates on auto loans remain extremely low and lenders have increased credit to consumers, including to subprime borrowers. The Fed plans to keep rates at very low levels for the next 18+ months which will support continued growth in auto sales. Leasing is also increasing as lenders are more bullish on residual val-ues. Consumer auto credit has more than doubled from the lows of 2008.

Projected Increases in New Unit Sales. Partly due to the trends listed above, some analysts predict new unit sales in the US will grow 5.6% from 14.5M units in 2012 to 15.3M units in 2013, and back to 17M units in the next few years. This would return us to the peak sales years of 2002-2006.

SAAR Growth is Slowing. While auto sales are likely to continue to increase over the next few years, the pace of growth has been slowing. Dealers are unlikely to enjoy double digit revenue growth as they have since the recession ended in 2009.

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Unemployment Rate vs. US Light Vehicle Sales

US Seasonally Adjusted Unemployment RateUS Light Vehicle Sales

Soruce: Bureau of Labor Statistics; Automotive News

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Consumer Confidence vs. US Light Vehicle SAAR

SAAR Consumer Confidence

Soruce: Consumer Confidence Board; Automotive News

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17.0 M

10.0 M

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18.0 M US Light Vehicle Sales

Unit Sales Estimates

Source: Automoitve News; Various Industry Analysts; Morgan Stanley 2016 Estimate

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Source: Center for Automotive Research

Growth slows to 2-3% as market returns to"normal" sales levels

The rapid growth in

SAAR is beginning

to taper off

4.1%

2.0%1.3%

3.1%

0.4%1.1%

1.7%

Annualized GDP Growth

DEALERSHIP PERFORMANCE TRENDS

Strong Profits for Private and Public Dealers. Private dealerships generated an average of $852K in profits per store during the twelve months ended May 2013, according to NADA. This was a record high, but up just 1% from the full year 2012. This was a surpris-ingly small increase as new unit sales are running 9% higher in the first five months of 2013 compared to the same period in 2012. We may be seeing the influences of falling new vehicle margins (discussed below) as well as rising costs.

Public retailers’ pre-tax operating profits for the six months ended June 30, 2013 were up 22% over the same period in 2012. The table below shows strong performance across almost all of the publics.

It is interesting to see that the growth in earnings for public retailers is so much higher than for private dealerships. Perhaps this is due to the fact that the public companies are primarily located in sun-belt states that might be enjoying a stronger recovery than other regions. It is partly due to the additional stores the publics have from add-points and acquisitions. But we may also be seeing the effects of an increasingly complex busi-ness. Larger groups may be better positioned to respond to changes in consumer needs, apply technology, train employees and use their large size to drive down costs.

Growth in Dealership Values May Be Slowing. Auto retail stocks were the darling of investors and significantly outperformed the overall market, auto makers and auto sup-pliers from 2009-2012. However, in the second quarter of 2013, retailers have under-performed the market. The S&P 500 and the total shareholder returns for the global OEMs and suppliers increased over 2%, 10% and 8%, respectively, while auto retail shareholder return increased just 0.1%. Investors are signaling that they expect the dealership earnings to grow more slowly than profits in other industries.

*Source: Automotive News. Total Shareholder Value Return is defined as change in value of a share of stock plus dividends paid to shareholders divided by the original value per share of the stock.

$851,738

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$400,000

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$1,000,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 LTMMay-2013

Average Private Dealership Earnings

Source: NADA

AUTONATION PENSKE GROUP 1 SONIC ASBURY LITHIA TOTAL

(in 000s) Y/Y ∆% (in 000s) Y/Y ∆% (in 000s) Y/Y ∆% (in 000s) Y/Y ∆% (in 000s) Y/Y ∆% (in 000s) Y/Y ∆% (in 000s) Y/Y ∆%

Revenue $8,523 12.7% $7,104 9.6% $4,299 20.7% $4,286 5.8% $2,570 15.2% $1,912 22.5% $28,694 12.8%

Gross 1,360 10.5% 1,103 10.3% 642 17.6% 637 3.3% 429 13.9% 306 18.5% 4,478 11.2%

Pre-Tax Income

(x. Unusual Items) 301 18.6% 185 19.8% 119 38.1% 78 (0.3%) 88 42.0% 77 31.3% 844 21.8%

Total Shareholder Value Return*

Q2-2013 1 Year 3 Year

Retailers 0.1% 43.5% 176.6%

Suppliers 8.1% 39.0% 78.8%

OEMs 10.1% 35.7% 78.3%

Life is good: profits are

at record levels for many

public and private

dealerships

Sales Per Franchise Are Converging. The number of new units sold per franchise loca-tion has become much more similar in recent years. In 2007, a Toyota store outsold the average mid-line dealership by a 3:1 ratio compared to a 2:1 ratio today. Also in 2007, Lexus outsold its luxury competitors by a 2.7:1 ratio per store compared to a 1.9:1 ratio today. Sales per franchise are much more similar today for a number of rea-sons, including fewer domestic stores and improved vehicle quality across the board. Toyota and Lexus still have very attractive business models, but other franchises have narrowed the gap. It will be very interesting to see the battle between the OEMs over the next few years. Will Toyota/Lexus regain their dominance or will the competition continue to narrow the gap?

Margin Compression. After a brief lift from 2010-12, new vehicle margins are again on the decline. Aggressive sales goals by the OEMs and stair-step programs are contrib-uting factors. If this trend continues, total new vehicle gross profit may begin to de-cline at dealerships if margins fall faster than sales increase. We hope dealers find a way to reverse this trend as many will be quite irritated if their profits fall while SAAR is rising.

Add Points. A number of OEMs have begun to issue new points to dealers, particularly those that have expressed goals to substantially increase their US sales. While add points can be a windfall to the recipients (and sometimes a cash drain), they have a negative effect on contiguous dealerships. Dealers have told us that profits can drop 30% at stores contiguous to add points. Declining profits obviously hurt blue sky val-ues. Mercedes-Benz and VW may be most active in issuing add points.

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2,000 Sales Per Franchise: LTM Jun-2013 Sales Per Franchise: 2007

Source: Automotive News

Toyota vs. Avg MidlineSales Per Franchise

2007 - 3:1 NewLTM Jun-13 - 2:1 New

Lexus vs. Avg LuxurySales Per Franchise

2007 - 2.7:1 NewLTM Jun-13 - 1.9:1 New

$2,328

$2,223 $2,257

$2,306

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Average Gross Profit Per New VehiclePublic Group Same Store Sales

Source: SEC filings

New unit sales per

franchise have converged

in recent years

The decline in new vehicle

margins could undermine

the lift in SAAR

BUY-SELL TRENDS

Private Dealers Are Very Active. Private deal volume has more than doubled in the first half of 2013 compared to 2012, according to information submitted to Automotive News. We are in frequent contact with private groups that are enjoying strong cash flow and trying to grow through acquisitions. Some groups are even looking for very large acquisitions – in excess of $100M in purchase price. They are willing to travel well out of their markets for larger deals and can outbid public companies. We have two clients who are selling their businesses this summer for an average of $50M to private buyers.

Public Companies Are Also Hungry. Every CEO has stated they are looking to invest substantial amounts in acquisitions if they can find dealerships at acceptable prices. Acquisition spending by the publics on US dealerships in the first half of 2013 is up 8% compared to the same period in 2012 and total acquisition spending is up 17% includ-ing international deals. If this growth continues, the publics would be back to an acqui-sition spending level last seen in 2007.

Large Deals Are Increasing – A Favorable Environment for Owners of Highly Valuable Companies. We researched the data on acquisitions by public retailers and found that from 2002-2011 there were only six US acquisitions over $100M (Presidio represented the seller in one of the recent transactions above $100M). But in just the past three quarters the public companies have reported two acquisitions over $100M, including international deals. And as we stated above, private buyers are also willing and able to write large checks to acquire dealership groups. This is a favorable trend for owners of highly valuable auto businesses, as their ease of exit today seems greater than it has been for many years.

Buyers Are Interested in Almost Every Franchise. Presidio compiled the buy-sell activity of the Top 10 Dealer Groups which include all of the public retailers plus the Van Tuyl, Hendrick, Staluppi and Larry Miller groups. The graph below shows which franchises they purchased between 2011 and mid-year 2013.

There were 15 different franchises acquired over the past 18 months by the Top 10, the broadest selection in recent memory. German franchises continue to be the most pre-ferred by the Top 10, comprising 38% of their US acquisitions from 2011 to June 2013 - far above their combined US market share. Honda, Toyota, Hyundai and other luxury

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2011-2013 US Acquisitions by FranchiseTop 10 Groups

2013 2012 2011

Buyers are interested in

almost every franchise

The number of dealership

sales appears to have

more than doubled in 2013

compared to the same pe-

riod in 2012

brands are also leading targets. We keep expecting more acquisitions of domestic dealer-ships given their lower prices and huge dealer networks, but buy-sell activity compared to their overall market share is low. Perhaps that will change as their profits per store climb to levels that gain the attention of these large buyers.

FRANCHISE VALUATION RANGES

Presidio is involved in a number of transactions each year, and we discuss many other transactions with dealership buyers and the attorneys and accountants who advise them. The information that we gain from these relationships drives our assessment of how buy-ers value dealerships.

Dealership Valuation Methods. There are various ways to value dealerships. For our pur-poses, we use the historical industry standard method of combining blue sky (calculated as a multiple of adjusted pre-tax income), plus the value of real estate, and plus the book value of other assets acquired. Pre-tax income should be adjusted to provide a buyer with a clear view of the profits being generated by a dealership.

Various conditions specific to a particular dealership will cause it to trade above or below the ranges we set forth here. The team at Presidio has been involved in the purchase or sale of hundreds of dealerships and has expertise in understanding how these factors will influence a dealership’s likely market value.

The following sets forth our estimates for the normal range of multiples of current ad-justed pre-tax profit that buyers would pay for these franchises in 2013 assuming aver-age performance and no major real estate issues.

Luxury Franchise Blue Sky Multiples

BMW/MINI. Highly desirable. Sales increased 9% in the first half of 2013 compared to same period in 2012. Premium products, youthful image, and excellent fixed operations. New facility requirements are coming but may not be extensive. Same multiple range: 5.5 – 7.5x.

Mercedes-Benz. Highly desirable. Sales were up 12% through July 2013. The A Class should attract younger customers and the new S Class should generate significant profits. But we are hearing grumbling about the high level of involvement MB has in its dealer operations and concerns about add points. Same multiple range: 5.5 – 7.5x.

Lexus. Still much in demand and boosted by a sales increase of 12% through July. Lexus dealers remain confident in the rebound of their franchise and love their relationship with their supplier. Same multiple range: 6.0 – 7.0x.

Audi. A very hot franchise today. Sales were up 14% through July and Audi wants to nearly double its volume by 2018. Profits per store are lower than other premium luxury stores, but gaining. Many buyers want these stores. Higher multiple range: 6.0 – 7.0x.

Porsche. Sales increased 30% through June 2013. Porsche has among the highest new vehicle margins in the industry and its new products should bring additional volume, but facility upgrades may be needed for many dealers. Same multiple range: 6.0 – 7.0x.

Jaguar/Land Rover. Combined sales are up 14% in 2013. Margins are very high on LR products and fixed ops are strong. The new F Type will help with much needed volume for Jaguar and bring in a younger buyer. Tata is investing $7+ billion on new products over the next few years which should drive higher volume. Facility actions will be re-quired at many stores. Higher multiple range on Jag/LR combined stores: 4.0 – 5.0x.

Cadillac/Acura/Infiniti. Low sales volumes per store and uneven product lines mean profits are often small relative to facility expense. And lower priced products from BMW and Mercedes may hurt these brands. Except for Cadillac, these near-luxury brands are underperforming the market in 2013. Same multiple range: 3.0 – 4.0x.

Luxury franchises

continue to be highly

desirable

Mid-Line Import Franchise Blue Sky Multiples

Toyota. Sales increased 7% so far in 2013, down from the torrid 27% increase in 2012. Deep pockets at the OEM level (for R&D and cheap consumer financing) and high profits per store are among the reasons many buyers seek these franchises. Same multiple range: 5.0 – 6.0x.

Honda. Sales are up 9% so far in 2013. Honda seems to be back on track with its product styling, as evidenced by the new Civic and Accord. The franchise is easy to operate compared to many others. Plus dealers love their relations with the factory. Same multiple range: 5.0 – 6.0x.

Hyundai. Sales growth has virtually stalled at just 2% in 2013, far below the double digit growth rates of prior years. Perhaps this is due to the recovery of Honda and Toyota, and greater competition from the Domestics. And new production capacity is needed or Hyundai may lag the market. Slightly lower multiple range: 4.0 – 4.5x.

VW. Sales have decreased 1% in 2013, which was certainly not VW’s plan after an-nouncing its commitment to more than double its sales within the next few years. While Top 10 buyers have purchased seven VW franchises in the past 18 months, we are hearing “the bloom is off the rose” at the moment. Slightly lower multiple range: 4.0 – 4.5x.

Kia. Sales have declined 3% so far in 2012, breaking its streak as the fastest growing franchise for many years. But with so many more units in operation, we would expect Kia stores to grow in profitability as fixed ops picks up at the store level. Same multi-ple range: 3.5 – 4.5x.

Subaru. This franchise has had remarkable growth, with sales up 27% so far this year. Subaru has “come out of nowhere” to be a major franchise in many areas. Very desirable in markets with snow. Higher multiple: 3.5 – 4.5x.

Nissan. Sales were up 10% so far in 2013. Few buyers seek these franchises as fac-tory relations can be challenging and profits per store are much lower than Honda and Toyota. We hear Nissan is working on these issues. Same multiple range: 3.0 – 4.0x.

Mazda. Sales grew by just 4% so far in 2013. Few buyers seek these franchises. Lower multiple range: 3.0 – 3.75x.

Domestic Blue Sky Multiples

(Note: In markets dominated by trucks, like Texas, buyers will likely place a premium on domestic franchises)

Ford. Sales grew 14% so far in 2013, higher than the market. The housing recovery is boosting truck sales and Ford is also enjoying success with its smaller vehicles. Many new products are launching soon so growth should continue. Buyers are seeking the-se dealerships more than any other domestic franchise. Higher multiple range: 3.5 – 4.5x.

Chrysler-Jeep-Dodge-Ram. CJDR continues its impressive sales run with an increase of 9% so far in 2013. A lift in construction should boost Ram sales further. Buyers are interested in these franchises. Slightly higher multiple range: 3.25 – 4.25x.

Chevrolet. Sales are up 7% in 2013, slightly underperforming the market. Chevrolet is launching many new products over the next three years so some analysts are pre-dicting faster growth. Dealers still complain about poor communications with the fac-tory. Slightly higher multiple range: 3.0 – 4.0x.

Buick-GMC. With an increase of over 11% in 2013, Buick-GMC stores are outpacing the industry, perhaps due to a spike in trucks. Like Chevrolet, dealers are also getting many new products over the next three years. Slightly higher multiple: 3.0 – 3.75x.

Honda and Toyota remain

top picks for dealership

buyers

We expect more purchases

of domestic dealerships in

2013

SUMMARY

The market for dealership sales is strong. Private and public dealer groups are seeking acquisitions as they have con-fidence in the health of the auto industry and want to grow when times are good. Dealership values are high as there are relatively few sellers in the market today, but many buyers. We are beginning to see signs that the growth in profits per dealership is slowing. We hope dealers will remain vigilant on keeping their costs down as the rate of sales growth declines. We are impressed with how many franchises are performing well today, and we see this as a golden period in our industry. Buyers can realize good returns compared to other investment options, and sellers can command attractive prices for almost every franchise.

We encourage all dealers near retirement age to develop a plan for how and when they will transition their dealerships. Presidio is well positioned to assist you in developing and executing on your plan. Our clients hire us for the following reasons:

PRESIDIO CAPABILITIES

Client Prioritization. Presidio Automotive is part of a larger firm that focuses on building our clients’ wealth over the long-term. We take a marathon, rather than a sprint approach to our buy-sell advisory work. Presidio does not “list” dealerships for sale. Our team commits a tremendous amount of time and energy to optimize the results of a limited number of transactions per year. We work exclusively for our clients, aligning our interests with theirs.

Price. Our highly detailed offering materials tell a compelling story to buyers and the confidential, structured process that we run creates competition between buyers designed to result in strong pricing for sellers.

Experience. Presidio’s team has been involved in 150+ transactions and knows how to navigate difficulties to arrive at a successful closing.

Intermediary. We maintain confidentiality and help prevent personality clashes between owners and buyers.

Relationships. Our team knows leading buyers across the US and understands what they want to buy, their ability to close, and how they respond to a sales process.

Speed. The Presidio team is fully dedicated to selling your business, whereas a dealer may have difficulty talking to multiple buyers simultaneously, while maintaining strong operating performance.

Many dealerships and dealership groups are highly valuable and would benefit significantly from professional representation. We believe Presidio’s services deliver optimal results for our clients. If you are interested in learning more about us or discussing the current buy-sell market, we look forward to a confidential conversation with you.

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2.0x

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The Presidio Multiples

Increased DeclinedSteady

Change From Prior Report

Source: Presidio Estimates

Alan Haig is head of Presidio’s automotive practice. Mr. Haig joined Presidio from AutoNation where he was Senior Vice President and responsible for all acquisitions and divestitures. During his career, Mr. Haig has been involved in the pur-chase or sale of more than 160 dealerships. Haig began his career in investment banking with Drexel Burnham Lambert in New York and later served as a Managing Director for Caymus Partners, a boutique investment banking firm. He also served as Director of Business Development for Blockbuster Entertainment Corp. Over the course of his career, Haig has completed over 100 acquisitions, divestitures, or capital raises for a total value of approximately $5.5B. Mr. Haig earned an MBA with honors from Columbia Business School, an MA from University of North Carolina, and his BA from Dart-mouth College. He lives in Fort Lauderdale, FL with his wife and four children.

Alan Haig: Phone: (954) 646-8921 | Email: [email protected]

Erin Kerrigan is a Managing Director with Presidio’s automotive practice, where she focuses primarily on representing dealers on buy/sells in the Western US. Ms. Kerrigan joined Presidio from AutoStar, a large dealership lender and pro-perty lessor. At AutoStar, Kerrigan led transaction origination and oversaw a $160 million dealership loan and lease portfolio. Prior to joining AutoStar, Ms. Kerrigan founded Skye Automotive, LLC, a private equity firm focused on automo-tive retail, was a private equity investor for The Edgewater Funds, and was an investment banker at Piper Jaffray. Ms. Kerrigan is a recognized industry expert (#1 speaker at NADA 2012) and influential writer on the topic of finance in her monthly Dealer Magazine article. Ms. Kerrigan graduated from Northwestern University with a BA and the UCLA Ander-son School of Business with an MBA. She lives in Newport Beach, CA with her husband and three children.

Erin Kerrigan: Phone: (949) 202-2200 | Email: [email protected]

Nathan Klebacha is a Vice President with Presidio’s automotive practice. Prior to Presidio, Mr. Klebacha spent six years with Asbury Automotive where he was involved in the purchase or sale of 50 dealerships. Before Asbury, Mr. Klebacha held positions at O’Shaughnessy Capital Management and Bear Stearns Asset Management as assistant portfolio manag-er for quantitative equity investments. Mr. Klebacha graduated from the University of Connecticut with a BS degree in Accounting and the NYU Stern School of Business with an MBA. He lives in San Francisco with his wife and two children.

For more information please visit our website: www.presidioautomotive.com

The Presidio Group’s corporate advisory activities are performed through its subsidiary Presidio Merchant Partners LLC. Presidio Merchant Partners LLC is the publisher of the Auto-motive Retail M&A Market Report. Although we believe we have compiled the information contained within this report from reliable sources, we do not guarantee the information or represent that it is accurate. We provide this general information, but do not intend to provide advice on the material herein. This publication is neither an offer to sell, nor a solicitation of an offer to buy securities. Member FINRA, SIPC. © 2013 The Presidio Group LLC

Select transactions completed by members of our team.

THE TEAM AND SELECT TRANSACTIONS

Panama City

has been acquired by

has been acquired byhas been acquired by

has been acquired by has acquired

&

have been acquired byhas been acquired by

Cunningham BMW


Action

Nissan

has acquired

of Mission Viejo


Metro Lexus

Ascent Automotive

Group

has acquired

Harloff BMW

has acquired

Autohaus

has acquired

John Roberts BMW has been acquired by

has acquired

Glauser


Global Imports, Inc.

has acquired

Princeton

ASBURYAUTOMOTIVE GROUP

Elway Automotive Group

has acquired


has acquired

Toyota of

Roswell

ASBURYAUTOMOTIVE GROUP


Lute Riley Honda


Sovereign Motor

Cars Ltd.

Of Brooklyn, NY

CarmichanHoldings


DESERT EUROPEAN

MOTORCARS, LTD


UPCOMING EVENTS

Please join Alan Haig and Erin Kerrigan as they discuss the buy-sell market at the following

events.

October 3, 2013: Clifton Larsen Allen Seminar: Keys to the Success of Your Dealership

Chicago Automobile Trade Assoc., Oakbrook Terrace, IL

October 6-8, 2013: National Association of Dealer Counsel Fall Conference (NADC)

Trump International Hotel & Tower Chicago

October 17-18, 2013: American Institute of CPAs National Auto Dealer Conference (AICPA)

Gaylord National Hotel, Baltimore, MD

January 22-23, 2014: Auto Team America: Advanced Capital Strategies / Buy-Sell Conference

The Board of Trade, New Orleans

January 24-27, 2014: National Auto Dealers Association Annual Convention (NADA)

New Orleans Convention Center: Buy-Sell Workshops

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