US retailer AutoNation is close to end negotiations for acquiring several dealerships in the country.
“We have quite a number of deals in discussion that we would very much like to do,” Chief Executive Officer Mike Jackson said. “There’s still a gap between sellers and buyers that has to be bridged.”
This year the US retailer of new vehicles has not invested in new acquisitions, after it spent $64.2 million on purchases during the first nine months of 2011. The company announced that third-quarter net income increased to $81.6 million, from $70.7 million during the same period last year. According to Presidio Automotive advisory firm, US auto retailers’ acquisition activity, including AutoNation, plunged 55% during the first half of this year to $103 million.
Jackson said that there are still many dealers looking to sell stores, reminding of the drop in acquisitions during the US auto market fall to a 27-year low in 2009. That same year, spending on acquisitions by public companies, decreased to $16 million, from $812 million in 2006.
“It’s a little bit of a standoff, that, at a certain point, I think the market will set to a common ground that makes sense, and then probably there will be quite a number of transactions,” he said. “I just can’t say when.”