Franchise Fairness Associates, a personal investment decision business related to longtime automaker government Mark LaNeve that launched in November 2021, has produced its initial foray into car or truck dealerships through a multimillion-greenback offer with a escalating dealership team in the Northeast.
New York-primarily based Franchise Fairness Associates invested $70 million into Georgica Automobile Holdings, which is headed by Jonathan Sobel. The offer shut Oct. 21, stated Sobel, Georgica Auto’s CEO.
“We will use these resources for strategic acquisitions, items that match our company product,” Sobel instructed Automotive Information. “We presently have 1 offer pending. I can not go into details appropriate now for the reason that of confidentiality factors.
“But we are preparing to devote some of these proceeds in 1 transaction that is presently less than deal, and we are on the lookout at other discounts as nicely.”
Sobel observed that whilst a the vast majority of the cash will spur acquisition expansion, some will be applied to boost dealership services and the total purchaser working experience at his current suppliers.
The offer with Georgica Automobile is Franchise Fairness Partners’ initial investment decision in dealerships, stated Don Reese, CEO of the firm’s automotive device and a previous chief of applied-car or truck retailer DriveTime. LaNeve, a previous Ford Motor Co. and Standard Motors revenue and advertising and marketing government, is chairman of that device.
Franchise Fairness Associates stated very last November that it aimed to expend about $400 million on minority stakes in vehicle dealerships all through a a few-yr time period.
Sobel and Reese declined to disclose Franchise Fairness Partners’ share stake in Georgica Automobile but verified “it is a minority stake.”
“Jon’s essentially our Northeast man, and we might like to carry on to improve with him in the Northeast,” Reese stated. “And we are on the lookout to do that in other elements of the place.”
Sobel explained Georgica Automobile as a freshly shaped entity made to aid the transaction with Franchise Fairness Associates. Georgica Automobile has dealerships throughout New York, New Jersey and Pennsylvania. Sobel’s portfolio of dealerships signifies domestic, import and luxurious brand names.
Sobel observed that 1 of his suppliers, Jaguar-Land Rover Manhattan, previously has a minority spouse and, as a final result, is different from Georgica Automobile and Franchise Fairness Partners’ investment decision.
Franchise Fairness Associates is backed by New York investment decision business HPS Investment decision Associates. HPS allotted $one billion to fund Franchise Fairness Associates, which targets investment decision in 5 parts: vehicle dealerships, eating places, weighty-devices dealerships, beverage distributors and buyer companies these types of as well being and splendor.
Franchise Fairness Associates was co-established by Michael Esposito and Scott Romanoff, who are the firm’s handling companions. Each Esposito and Romanoff are previous companions at Goldman Sachs. That relationship was critical to this initial offer as Sobel, also a previous Goldman Sachs spouse, understood the pair.
“It appeared like a pretty sensible investment decision for them,” Sobel stated. “And they appeared like a great strategic spouse for me.”
Reese stated Franchise Fairness Associates is functioning on other investments but declined to talk on discounts that are in course of action.
“Our offer move has been pretty lively,” Reese stated.
Sobel stated he has not acquired or bought any dealerships so significantly in 2022. But the offer with Franchise Fairness Associates follows an lively 2021 for him in the get-provide sector.
Sobel sold Alfa Romeo of Manhattan-Maserati of Manhattan and Chrysler-Dodge-Jeep-Ram-Fiat of Manhattan in New York to Dennis & Co. Automobile Team in December.
In July 2021, Sobel acquired two Audi dealerships and a Porsche store in suburban Philadelphia. Sobel also acquired a Chevrolet-Buick-GMC dealership in the central New York town of Auburn that summertime, he observed, which adopted the acquisition of three Auburn stores in February 2021.