Darling's Auto Group expands south with purchase of Brunswick dealership
Courtesy / Darling's
A rendering shows the rebranded Yankee Ford dealership in Brunswick, now known as Darling's.
Darling’s Auto Group, a network of car dealerships in Augusta, Bangor and Ellsworth, is expanding into southern Maine after recently acquiring the Yankee Ford franchise in Brunswick.
Terms were not made public in a news release Monday. The deal closed Dec. 15, according to Darling’s spokeswoman Lorilei Porter. She said there are no plans to lay off any of the 38 employees in Brunswick.
The dealership, at 262 Bath Road, will continue to sell Ford vehicles, but is being renamed and will be the group’s second Ford dealership. Darling’s, which is headquartered in Brewer and has over 400 employees, also sells Fords in Bangor. The group operates a total of six locations representing 14 automobile brands.
But with the addition of the Brunswick location, Darling’s gains a foothold in the lucrative southern part of the state.
“Southern Maine offers us an opportunity to serve a new demographic which can help us grow our business in both locations as we learn from each other,” said President Jay Darling in the release.
“The Brunswick and Bath area is incredibly vibrant and we are very excited to become a part of this region. With its close proximity to Bath Iron Works, Bowdoin College, and the many other existing businesses in the area, we see a huge potential for growth in this market.”
Bob Esposito, Yankee’s owner, told Mainebiz he hadn’t been looking to sell the business. In fact, he said, the Brunswick dealership had been having its best sales year ever, despite the pandemic.
Darling’s approached him over the summer, and “the math worked out,” he said.
Esposito and two partners in 2016 purchased the Brunswick dealership and Ford franchises in South Portland and Thomaston, and made upgrades at each location. Esposito had previously worked as vice president of sales and marketing at the South Portland dealership, also known as Yankee Ford.
A few months ago Esposito bought the majority interest of partner Steve Goodrich, the former CEO of Portland-based fintech ZipLine, which was acquired in June 2020. The other partner, Esposito’s son Anthony Esposito, took ownership of the Thomaston business, Rockland Ford, in 2019.
"It was challenging to be on three fronts," Bob Esposito said Tuesday. The sale of Yankee Brunswick “now allows me to pull into one location."
Re-revving growth
Meanwhile, another dealership business is expanding its footprint in southern Maine.
Rowe Auto Group, based in Auburn, in November purchased a Westbrook property for $1.25 million and plans to build a 17,000-square-foot service facility there, the group’s president, Wally Camp, told Mainebiz Tuesday.
Rowe will raze a vacant medical office building at the site, 2 Chabot St., and plans to begin construction this year. The new facility, near Rowe’s Ford, Hyundai and Lincoln dealerships in Westbrook, will primarily handle commercial trucks, Camp said.
Rowe’s service business has grown enough to make the new site necessary and is a sign of the overall strength of industry, he added. “We have confidence in that part of the market. We have confidence in the market in general.”
Recent data from the automotive industry seem to bear out his optimism.
Over 4 million new cars and trucks were expected to be sold in the fourth quarter of 2020, a 2.8% increase over Q3, according to industry consultant Edmunds. While sales for the year were estimated to be 15.5% below the level in 2019, “the number is much stronger than expected given major disruptions created by the outbreak of the coronavirus,” Edmunds said in a statement last month.
The pandemic and the rebound of auto sales may also be affecting deals for dealerships.
Like other business transactions, many dealership M&A’s froze in the early days of COVID-19. But with renewed interest in consumer car buying, there’s been more interest in buying the businesses. The uncertainty of the pandemic may also be a reason for dealers to rethink their future, as Esposito did.
An investment banking firm that specializes in dealership transactions, Haig Partners, recently wrote: “The back half of 2020 and 2021 should see some pretty strong transaction volume. Further, we anticipate some dealers will re-evaluate their future once they’ve had the chance to catch their breath from the shutdown and restart of business.”
Erin Kerrigan, who heads Kerrigan Advisors, another dealership investment firm, said in August, "We expect M&A to reach record levels in the second half of the year as buyers are bullish on the industry’s earnings growth, attracted to auto retail’s resilient business model, and able to capitalize on the low cost of capital in today’s low interest rate environment. We are also seeing more sellers coming to market and ready to exit at today’s high prices, particularly those without a clear succession plan."
Back in Brunswick, Esposito said, “The industry has really been conglomerating. That mass gives bigger groups a point with manufacturers that makes operations more profitable.”
He’s confident that selling the business to Darling’s was the right choice.
“They’re a great company. They’re family-oriented and they take care of their people,” he said. “If it weren’t for Darling’s, the dealership wouldn’t be selling.”
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