Industries Served

Automotive

Beacon has successfully advised multiple businesses in the automotive and related automotive sub-industries.

  • Engine, Battery and OEM Manufacturers
  • Aluminum, Steel & Fabricated Metal Manufacturers
  • Electronic Equipment Manufacturers 
  • Tire Manufacturers
  • Automobile Manufacturers
  • Heavy Vehicle Manufacturers
  • Car Dealerships 
  • Vehicle Wholesalers
  • Car and Truck Rentals

Beacon successfully advises BMW dealership and facilitates the sale.

Mandate

Beacon was engaged by an authorized and exclusive dealer of BMW motorcycles. The business had exclusive rights in London, Southwest Ontario and Oakville regions. The owners, at the time, had run the business for 20 years and were seeking an exit due to retirement. Due to Beacon’s strong presence in South-West Ontario, Beacon was chosen as the exclusive broker and provided sell-side transaction advisory services through the entire sale process.

Implementation

Beacon began by compiling a fairness opinion to determine the business’ true fair market value and proceeded to compile deliverables and confidentially market the mandate to potential buyers. The business had large levels of inventory and short lease expiration. Beacon was careful in accounting for these factors in our valuation to ensure that we attract bids while meeting our client’s expectations. Through our large network of buyers and industry professionals, we were able to attract several buyers for the business. Based on the seller’s criteria and vision, as well as our financial acumen, we were able to pre-screen buyers and solicit offers from serious buyers.

Outcome

Beacon’s team assisted our client through every step of the sale process, and successfully completed the transaction. Beacon effectively negotiated a deal with a private buyer who had previous experience in the auto industry. Our team advised the seller through the buyer due diligence process, ensuring transparency between both parties. Beacon negotiated a cash deal with no vendor take back allowing the seller to completely exit the business. In addition, Beacon made sure that the business was prepared for the successor to maintain smooth operations through the transition period without damaging value.

Industry Overview

The Canadian automotive industry includes all vehicle and automobile equipment manufacturers and wholesalers as well as car dealerships and retailers of light vehicles, automobiles, trucks, buses and motorhomes. The industry is comprised of a few major auto manufacturers like Chrysler, General Motors and Ford which control the pace of the industry. Key suppliers for this industry include steel, aluminum and other raw material manufacturers along with original equipment manufacturers who design and build individual parts like engines, batteries and electronic parts for larger auto manufacturers. Most major manufacturers have a B2B model with typical customers being dealerships, wholesale retailers, and rental companies, which in turn have B2C models. The industry is currently in its mature stage and is characterized by consolidation and heightened M&A activity. The Canadian auto industry is moderately regulated and manufacturers must comply with safety standards. Being a highly globalized industry, trade regulations play an influential role. The industry is primarily driven by consumer discretionary income which generates demand for vehicles. The industry thrives in a low-interest rate and low commodity price environment which allows higher profit margins for manufacturers and retailers as well as cheaper financing for retailers. A weaker currency also generates tailwinds by Canadian goods more competitive. In the recent decade, auto manufacturers have moved operations overseas, to Asian and South American countries, due to an abundance of cheap labour and non-unionized labour.
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