Aaron J. Zeigler Interviewed on Mergers & Acquisitions strategy by MiBiz.com's Jayson Bussa

Zeigler Automotive keeps M&A momentum by adding luxury brands to portfolio

BY Sunday, February 14, 2021 05:15pm

Despite its wide footprint throughout a tri-state area, Zeigler Automotive Group still found itself lacking a few of the big name luxury brands in its portfolio.

"The one franchise I got asked about most was Mercedes," said Aaron Zeigler, president and CEO of Kalamazoo-based Zeigler Automotive Group, which operates 75 franchises and 29 stores throughout Michigan, Indiana and Illinois. "That was probably No. 1 on our wish list. The second one I got asked about the most that we didn't have was Land Rover."

Zeigler and his team were able to check those and other names off of their wishlist at the beginning of 2020 when the company acquired three luxury dealerships from Barrington, Ill.-based Motor Werks Auto Group. 

The deal was recognized as the winner in the 2021 MiBiz M&A Deal of the Year Awards in the retail category.

 Through the deal, Zeigler Automotive Group acquired an Infiniti store (its second in the market) and a Mercedes-Benz and Sprinter store in Hoffman Estates, Ill., in addition to a Jaguar Land Rover store in nearby Schaumburg, Ill.

Zeigler also deals Chrysler, Alfa Romeo, Maserati, Fiat and Chevrolet in the same market.

The acquisition infused the regional dealership with 5,000 new units each year with a projected value of $350 million in sales annually. This boosts the company's annual sales numbers to the neighborhood of $1.6 billion on 40,000 units sold.

Per an early 2020 report by Automotive News, Zeigler Automotive Group was ranked No. 61 in dealerships nationwide for new car sales units, which was 15,888 vehicles and listed sales of almost $1.3 billion.

The deal, which was prompted when Motor Werks approached Zeigler, was also the largest one for Zeigler in terms of price. Zeigler noted that Hoffman Estates and Schaumburg are high-volume markets in the Midwest.

No stranger to scooping up available dealerships, Zeigler said that his team is able to streamline the integration process.

"When we go to buy a new dealership, or multiple dealerships, the acquisition team will show up and get all the systems integrated so we mirror the systems we have in our other dealerships, which really streamlines things for us," he said. "We were able, in this particular case, to bring those stores into our fold and really not miss a beat."

The deal was completed before the COVID-19 pandemic took hold in the U.S. Even through the pandemic, Illinois never shut down completely, and Zeigler's new dealerships had to crawl through a number of restrictions. Once restrictions were lifted, sales picked up in a big way.

In fact, Zeigler has seen a sales bonanza company-wide throughout most of the pandemic, which has continued into 2021, when the business just recorded its best January ever.

It also proved to be a good time to acquire the luxury brands that Zeigler Automotive Group did.

"The luxury brands were more in demand than any other brands we had," Zeigler said. "And I don't know why that is. Even during the shutdown, they still performed well."

Zeigler continues to keep his ear to the ground for opportunities, and he expects significant M&A activity in this space as a whole. 

"I think there are going to be a lot of opportunities out there," Zeigler said.