Mercer Capital's Value Focus: Auto Dealer Industry | Mid-Year 2015

VALUE FOCUS
Auto Dealer Industry
www.mercercapital.com
Overview Inside
The aptly named Great Recession hit the auto
industry and its dealers harder than almost any
other industry, save for construction and housing.
As unemployment rose, consumer spending
and home values plummeted. With little to no
discretionary income and no means to finance
car purchases, sales tumbled, margins were
squeezed, and GM and Chrysler filed for Chapter
11 bankruptcy. Recovery began in 2009, con-
fidence and disposable incomes rose allowing
consumers to fund purchases of more durable
goods, including cars. These trends are expected
to continue through 2019. However, the auto
dealer industry, though making a strong recovery
from the most recent recession, is facing pressures
from government regulation, shifting demand and
supply, and new market entrants.
More stringent environmental standards are
causing car prices to rise, the shift to internet for
information and purchasing is forcing margins
down (but also increasing volume), and demand is
shifting more toward hybrid, electric, and autono-
mous cars. The leading auto dealers are taking
notice of these shifting trends.
Macroeconomic Indicators
Productivity 1
Housing 3
Personal Consumption
and Confidence 5
NADA Dealer
Optimism Index 6
Energy 7
Auto Dealer Indicators
Average Dealer Profile 8
Vehicles and Price 10
Valuation Trends 11
Mergers & Acquisitions 14
Guideline Company Pricing 15
About Mercer Capital 17
Erickson Partners
Merges with Mercer Capital 18
Mid-Year 2015

Mercer Capital’s Value Focus: Auto Dealer Industry Mid-Year 2015
© 2015 Mercer Capital 1 www.mercercapital.com
Rising disposable income, a measure of consumers’ ability to support debt-funded purchases, is dependent on an economy’s productivity. While
the aptly named Great Recession reached its official end in mid-2009, economic growth remains somewhat subdued. Although the housing
market has strengthened, growth in the market remains weak. The unemployment rate reached pre-recession levels in December 2014, but labor
force participation remains low and has continued to fall. Economic growth is expected to remain positive, though government spending cuts,
political uncertainty, and rising interest rates are causes for concern. GDP growth expectations from private economists surveyed by The Wall
Street Journal are on the order of 2.8% for the first quarter of 2015 and 2.8% for all of 2015. This compares to GDP growth of 2.3%, 2.2%, and
2.4% in 2012, 2013, and 2014, respectively. Although the Federal Reserve ended its asset purchases, a significant tightening of monetary policy
(via an increase in the target federal funds rate) is unlikely in the short run until unemployment declines and inflation rises.
Macroeconomic Indicators // Productivity
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
GDP(inBillions)
AnnualizedRealGrowthRate
Quarterly Annualized Real Growth Rate Annual Real Growth Rate
GDP (Current Dollars) GDP (Chained 2009 Dollars)
Source: Bureau of Economic Analysis
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Annualized Quarterly Change Annual Change
Source: Bureau of Labor Statistics
Gross Domestic Product
According to advance estimates released
by the Department of Commerce’s
Bureau of Economic Analysis, Real Gross
Domestic Product, the output of goods and
services produced by labor and property
located in the United States, increased
at an annualized rate of 2.3% during the
second quarter of 2015. The increase was
attributable to gains in personal consump-
tion expenditures, exports, state and local
government spending, and residential
fixed investment. Federal government
spending, private inventory investment,
and nonresidential fixed investment
spending decreased. Imports, which are
subtracted from the national income and
product accounts used in the calculation
of GDP, increased.
Nonfarm Business Productivity
According to the Bureau of Labor Statis-
tics, seasonally adjusted nonfarm business
productivity, as measured by the hourly
output of all persons, increased at an
annual rate of 1.3% in the second quarter
of 2015. The increase was a function of the
2.8% increase in output combined with an
increase of 1.5% in hours worked. Labor
productivity, hourly compensation and unit
labor costs also experienced increases,
while real hourly compensation declined
1.1%. The productivity increase follows
decreases in productivity of 2.2% and
1.1% in the fourth quarter of 2014 and the
first quarter of 2015, respectively. Annual
average productivity increased 0.3% in
the second quarter of 2015 relative to
the second quarter of 2014. Productivity
increased 1.7% for the business sector
GDP
Change in Nonfarm Business Productivity
(inclusive of farming activity) in the second quarter of 2015. This was the result of a 2.8% increase in
output and a 1.1% increase in hours worked. Manufacturing productivity, generally more volatile in its
quarterly measures, increased 2.5% during the quarter.

Macroeconomic Indicators // Productivity (cont.)
-60.0%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
160.0%
Dow Jones Industrial Average S&P 500 NASDAQ Composite
Source: Bloomberg L.P.
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
Bureau of Labor Statistics
Equity Indices
Due to the Greek financial crisis spurring
a sell-off at the end of the quarter, the
Dow Jones, the S&P, and the NASDAQ
experienced losses during June 2015.
The Dow Jones and the S&P also posted
losses for the second quarter of 2015,
while the NASDAQ posted its tenth
consecutive quarterly gain. Driven by
signs of an improving economy and
the anticipation of the Federal Reserve
increasing rates, most U.S. Treasury
yields rose during the second quarter of
2015. The chart shows the relative price
performance of the Dow Jones Industrial
Average, S&P 500, and NASDAQ Com-
posite Indices.
Unemployment
According to the Labor Department’s
Bureau of Labor Statistics, the unemploy-
ment rate was 5.3% in June 2015, down
slightly from 5.4% and 5.5% in April and
May, respectively. Unemployment rates
increased steadily throughout 2008 and
into 2009, peaking at 10% in October 2009.
The October 2009 unemployment rate
represented the highest level since 1983.
Pre-recession unemployment levels were
reached in December 2014. The June
2015 unemployment rate is the lowest rate
since April 2008, though some experts
believe that is due to a shrinking work-
force. Excluding the recent trend, the last
time the labor force participation rate was
lower than its current level was 1977. As job
availability increases the labor force could
increase due to individuals reentering the
Equity Index Price Return
Civilian Unemployment Rate
workforce, which could lead to periodic increases in the unemployment rate in the foreseeable
future. Economists surveyed by The Wall Street Journal anticipate an unemployment rate of 5.1%
by year-end 2015 and a further decline to 4.9% by June 2016.

Traditionally, home owners have used home equity to purchase durable goods. When the housing market collapsed in late 2007, this method of
financing was effectively cut off. The housing market improved considerably from the depths of the financial crisis due to sustained reductions in
interest rates, though it remains well below highs seen in 2005 and 2006. Although the Federal Reserve has begun tapering the rate of asset
purchases, a significant tightening of monetary policy (via an increase in the target federal funds rate) is unlikely in the short run until unemploy-
ment declines and inflation rises. Further, home building activity has traditionally been a primary driver of overall economic activity because new
home construction stimulates a broad range of industrial, commercial, and consumer spending and investment.
“The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and
agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities
at auction.This policy, by keeping the Committee’s holdings of longer-term securities at sizable levels, should help maintain
accommodative financial conditions. When the Committee decides to begin to remove policy accommodation, it will take a
balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.The Committee
currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may,
for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.”
-Federal Reserve FOMC statement January 28, 2015
Macroeconomic Indicators // Housing
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
Jan-2005Jul-2005Jan-2006Jul-2006Jan-2007Jul-2007Jan-2008Jul-2008Jan-2009Jul-2009Jan-2010Jul-2010Jan-2011Jul-2011Jan-2012Jul-2012Jan-2013Jul-2013Jan-2014Jul-2014Jan-2015
30-Year Mortgage Rate 10-Year Treasury rate Effective Federal Funds Rate
Source: Federal Reserve Economic Data
Key Interest Rates
The Federal Reserve’s Open Market Com-
mittee lowered its target for the federal
funds rate to a range of 0% to 0.25% during
the fourth quarter of 2008, representing a
total rate cut of 175 to 200 basis points
during the quarter. Target rates were held
steady during 2009 and have remained
unchanged through the second quarter
of 2015. This has kept interest rates low,
increasing the ability of households to fund
spending. The yield on the 10-year Trea-
sury note is expected to increase during
2015, which could cause consumers to
switch to used cars, as new car loans are
less affordable.
Change in Key Interest Rates

Macroeconomic Indicators // Housing (cont.)
0
50
100
150
200
250
Jul-2005
N
ov-2005
M
ar-2006Jul-2006
N
ov-2006
M
ar-2007Jul-2007
N
ov-2007
M
ar-2008Jul-2008
N
ov-2008
M
ar-2009Jul-2009
N
ov-2009
M
ar-2010Jul-2010
N
ov-2010
M
ar-2011Jul-2011
N
ov-2011
M
ar-2012Jul-2012
N
ov-2012
M
ar-2013Jul-2013
N
ov-2013
M
ar-2014Jul-2014
N
ov-2014
M
ar-2015
Housing Price Index SA Case-Shiller 10 City Index SA Case-Shiller 20 City Index SA
Source: Federal Housing Finance Agency and Federal
Reserve Economic Data
Housing Prices
Housing prices have not yet recovered to
pre-recession levels but have increased
year-over-year since January 2011.
Change in Housing Prices
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
2.0
2.1
2.2
2.3
2.4
Private Housing Starts Single Family Starts
Source: U.S. Census Bureau
Note: Permits at a given date are generally a leading indicator of future starts.
Beginning with January 2004, building permit data reflects the change to the 20,000 place series.
Private Housing
Single Family
Housing
Housing Starts
According to the U.S.Census Bureau, new
privately owned housing starts were at
a seasonally adjusted annualized rate of
1,174,000 units in June 2015, 9.8% above
the revised May rate of 1,069,000 units,
and 26.6% above the June 2014 level.
The seasonally adjusted annual rate of pri-
vate housing units authorized by building
permits (considered the best indicator of
future housing starts) was 1,343,000 units
in June 2015, 7.4% above the revised May
estimate of 1,250,000, and 30.0% above
the June 2014 level. In January 2015,
the Census Bureau redefined the uni-
verse of permitting authorities, an action
it last undertook in 2004. The 2014 data
set (Universe) reflects an increase in the
number of permit-issuing places and a
decrease in the areas where permits are
not required. The Census Bureau indi-
cated that the 2014 Universe should be
comparable to prior Universe vintages,
although the Census Bureau did restate
2014 housing permits statistics using the
2014 Universe of permit issuers.
Seasonally Adjusted Annualized Rates of New Housing Starts and Building Permits
(millions of units)

Increases in disposable income allow for increases in personal consumption, especially debt-fund purchases like cars. However, these
increases must keep pace with inflation. Further, increases in disposable income tend to increase confidence in consumers and business
owners. Confident consumers have more optimistic expectations of the future. They expect a stronger economy, lower unemployment, higher
future wages, and better ability to pay for debt-funded purchases. Similarly, confident businesses are a gauge of an economy’s ability to employ
labor productively in the future.
Macroeconomic Indicators // Personal Consumption & Confidence
Disposable Income and Personal Consumption
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$32,000
$33,000
$34,000
$35,000
$36,000
$37,000
$38,000
$39,000
PersonalConsumption(BIllions)
PersonalIncome
Real Disposable Personal Income: Per capita, Chained 2009 Dollars, Monthly, Seasonally Adjusted
Personal Consumption Expendituress, Monthly, Seasonally Adjusted
Source: Federal Reserve Economic Data
0
20
40
60
80
100
120
Consumer Confidence Index NFIB Small Business Optimism Index
Source: Bloomberg, L.P.
Disposable Income and
Personal Consumption
Real personal income and personal
consumption have both been steadily
increasing year-over-year since 2010,
partly due to growth and partly due to
Federal Reserve policy keeping inflation
near 0.0%. Further, disposable income is
expected to continue rising through 2015.
Confidence
Both consumer and small business con-
fidence has been trending upward since
the Great Recession. This confidence
will drive demand for cars.
Change in Confidence

Macroeconomic Indicators // NADA Dealer Optimism Index
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
M
ar-03
M
ar-04
M
ar-05
M
ar-06
M
ar-07
M
ar-08
M
ar-09
M
ar-10
M
ar-11
M
ar-12
D
ec-12
D
ec-13
Increase No Change Decline Index Value
Source: NADA Data
NADA Dealer Optimism IndexNADA Dealer Optimism Index
According to the 2014 NADA Dealer
Optimism Index, fewer dealers believed
profits would continue to rise as of
December 2013. However, the same
survey showed dealer confidence has
surpassed pre-recession highs, and cur-
rent profits are expected increase.

Energy prices not only impact the price of manufacturing a car, but also the running price of a car, as consumers must fill up on gas regularly.
Increased environmental regulations have improved fuel economy of most cars but have also led to higher prices at the dealership. Conse-
quently, consumer demand has shift toward more fuel efficient, typically smaller, vehicles.
Macroeconomic Indicators // Energy
0
20
40
60
80
100
120
140
160
Cushing, OK WTI Spot Price FOB (Dollars per Barrel)
Source: Energy Information Administration
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
DollarsPerGallon
New York Harbor Conventional Gasoline Regular Spot Price FOB
U.S. Gulf Coast Conventional Gasoline Regular Spot Price FOB
Los Angeles Reformulated RBOB Regular Gasoline Spot Price
Source: Energy Information Administration
Spot Oil
Oil prices have steadily increased since
2009 to historically high levels through
the first half of 2014, shifting consumer
demand to hybrid and electric vehicles.
World crude oil prices decreased sharply
throughout the second half of 2014.
Gas
Gas prices have mimicked oil prices,
rising to historical highs in the first half
of 2014 before dropping sharply through
December.
Spot Oil Prices
Gas Prices

Macroeconomic measures including employment, productivity housing prices and starts, interest rates, and disposable income have provided an
environment conducive to car purchases. However, rising prices, downward pressure on margins, and changes in demand have caused shifts
in automobile demand.
Auto Dealer Indicators // Average Dealer Profile
9.0
9.5
10.0
10.5
11.0
11.5
12.0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
F2015
F2016
F2017
F2018
Passenger Cars Light Trucks Total
Source: IHS Automotive, formerly Polk
0
5
10
15
20
25
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Dealerships(Thousands)
Sales(Millions)
Cost of Sales Total Dealership Expense Pre-Tax Income Dealerships
Source: NADA Data
Average Age of Vehicle Fleet
IHS Automotive, a global automotive
market intelligence firm, found that the
average age of all light vehicles hit a record
high of 11.5 years in 2014 due to rising car
quality; they expect this rate to slow as
new vehicle sales continue to recover, not
hitting 11.6 years until 2016 and 11.7 years
until 2018. Further, they expect this trend
to provide more opportunities for the auto-
motive aftermarket.
Dealership Sales
By the end of 2013, there was an increase
of 30 franchised dealerships, the second
consecutive increase, reversing a consol-
idation trend that started in 1987.
Sales rose 8.8% in 2013, the second
year in a row, above pre-recession
highs. However, net profit before taxes
remained flat at 2.2%. Current pressure
on margins stems primarily from the fact
that the asymmetric information that once
favored dealers is balanced by internet
sites such as Edmunds, cars.com, and
autotrader.com.
Average Age of Vehicle Fleet
Dealership Sales

Auto Dealer Indicators // Average Dealer Profile (cont.)
Products and Services Segmentation
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Sales
New Vehicle Used Vehicle Service and Parts
Source: NADA Data
Products and Services Segmentation
From 2005 to 2010, the percentage of
sales from used vehicles and service and
parts segments of the industry rose, as
financing new vehicle purchases became
more difficult. Since then, new vehicles’
share of sales has gone up, but has not
recovered to pre-recession levels.

Auto Dealer Indicators // Vehicles and Price
Vehicles and Price
0
100
200
300
400
500
600
700
800
900
1000
$26,000
$27,000
$28,000
$29,000
$30,000
$31,000
$32,000
$33,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
NewVehiclesSoldPerDealership
AverageRetailSellingPrice
Average Retail Selling Price New Vehicles Sold Per Dealership
Source: NADA Data
Vehicles and Price
Through the end of 2013, prices were
forced up by rising oil prices and
increased environmental regulations.
Average vehicles sold per dealership
continued to rise even as the number of
franchised dealerships increased.

Valuation Trends
-25.00%
-20.00%
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
6/30/14 8/31/14 10/31/14 12/31/14 2/28/15 4/30/15 6/30/15
Auto Components Automobile Manufacturers S&P 500 NASDAQ Composite Dow Jones Industrial Average
-30.00%
-20.00%
-10.00%
0.00%
10.00%
20.00%
30.00%
6/30/14 8/31/14 10/31/14 12/31/14 2/28/15 4/30/15 6/30/15
Ford Motor Co General Motors Co Honda Motor Co Ltd Toyota Motor Corp Tesla Motors Inc Nissan Motor Co Ltd
Source: Bloomberg, L.P.
Index Performance
OEM Stock Performance
OEMs and Indices
Auto components have continued to outpace auto manufacturers
reflecting continued increases in consumer spending on maintenance
compared to pre-recession levels.
Nissan, Tesla, and Toyota are outperforming Ford, GM, and Honda. Sig-
nificant events in the last year influencing stock prices include a drop in
oil prices, the Takata airbag recalls, and new EPA emissions standards.

Valuation Trends (cont.)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Chrysler Ford General Motors Toyota
Honda Nissan Volkswagen Other Imports
Source: NADA Data
Brand Market Share By Unit Sales
In 2012, Chrysler was the only member
of the Detroit Three whose market share
rose. Of the three major Japanese
brands, Nissan’s fell while Honda and Jap-
anese brands gained market share. Other
imports have been gaining market share.
Brand Market Share By Unit Sales

-40.00%
-30.00%
-20.00%
-10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
6/30/14 7/31/14 8/31/14 9/30/14 10/31/14 11/30/14 12/31/14 1/31/15 2/28/15 3/31/15 4/30/15 5/31/15 6/30/15
AutoNation Inc Penske Automotive Group Inc Sonic Automotive Inc Group 1 Automotive Inc Asbury Automotive Group Inc Lithia Motors Inc
Auto Dealership Stock Performance
Publicly Traded Auto Dealerships
“We are pleased with how the AutoNation brand has been embraced, as
well as the continued rollout of AutoNation Express and the progress of
all our digital initiatives. Over 20% of our sales were generated through
AutoNation websites for the first half of the year.The first phase of Auto-
Nation Express, where a consumer can identify a vehicle, reserve that
vehicle and put a deposit on that vehicle, was completed six months
ahead of schedule. AutoNation is committed to providing transparency
and delivering a peerless customer experience through initiatives such
as AutoNation Express.” Mike Jackson, Chairman and CEO of Auto-
Nation. “AutoNation Reports Record Second Quarter EPS from
Continuing Operations.” 22 July 2015.
“We just completed the best quarter and six-month period in the his-
tory of our company. The performance of our business continues to
demonstrate the flexibility and resiliency of the company’s brand mix
and business model.The record second quarter results were driven by a
7.5% increase in retail automotive unit sales, a 50-basis point increase in
automotive retail service and parts gross margin and a reduction of 110
basis points in selling, general and administrative expenses as a percent
of gross profit.” Roger S. Penske, Chairman of Penske Automotive
Group. “Penske Automotive Reports Record Second Quarter
Results.” 29 July 2015.
“We are pleased to report another record-setting quarter. The combina-
tion of continued solid top-line growth in the United States and the United
Kingdom, combined with improved expense leverage, delivered all-time
record adjusted diluted EPS of $1.98. We are particularly pleased with
our 14 percent increase in both U.S. and U.K. Same Store used vehicle
sales and the acceleration of our U.S. parts and service revenue, which
was up 8 percent on a Same Store basis.Finally, although overall market
conditions have continued to deteriorate in Brazil, the combination of our
brand profile and cost cutting initiatives allowed us to deliver a pretax
profit in that market this quarter, which is an impressive accomplishment
by our Brazilian operating team.” Earl J. Hesterberg, President and
CEO of Group 1 Automotive. “Group 1 Automotive Reports Record
Quarterly Earnings.” 23 July 2015.
“I’m proud of our operations team for achieving the lofty goal of retailing
100 preowned vehicles per store per month. We have had quarters in
the past when we approached achieving this metric and several months
where we surpassed this metric, but it had never been achieved on a
quarterly basis. Generating this type of retail activity fuels our fixed oper-
ations and F&I areas where we are most profitable. We also worked
to build our fixed operations business in the quarter. In addition to the
benefits we experienced through the reconditioning work performed
to achieve the sale of 100 preowned vehicles per store per month,
we were able to grow overall same store fixed operations gross profit
$13.1 million, or 8.5%, compared to the prior year quarter. Fixed oper-
ations growth was achieved in our customer pay, warranty and internal
categories. This type of internal growth strategy is central to our One
SonicOne Experience (OSOE) initiative which is intended to grow the
topline revenue categories, generate retail activity, and realize benefits
over multiple gross profit streams.” B. Scott Smith, President of Sonic
Automotive. “Sonic Automotive, Inc. Reports Quarterly Adjusted
Continuing Operations Earnings per Share of $0.46.” 20 July 2015.
Valuation Trends (cont.)

Mergers and Acquisitions
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
0
5
10
15
20
25
30
35
2009 2010 2011 2012 2013 2014 1H 2015
TotalTransactionValue(millions)
NumberofTransactions
Total Transaction Value Number of Transactions
Source: Capital IQ
M&A ActivityWhile overall deal value was up in 2014,
the number of transactions decreased.
The number of deals in 2015 is on pace
with 2014, though overall deal value is
also down.

Dealer Pricing
Auto Manufacturing Pricing
30-Jun
Price
$
52 Week
Perf.
%
LTM
Ent.
Value
$ Mil
Debt /
Equity
%
EBITDA
Margin
%
EV /
Sales
Multiple
x
EV /
EBITDA
Multiple
x
EV /
Nxt Yr
EBITDA
Multiple
x
Price /
Earnings
xCompany Name Ticker
Sales
$ Mil
EBITDA
$ Mil
Ford Motor Co F 14.86 -9.63% 141,953 11,621 182,481 469.07% 8.19% 1.29 15.70 14.01 16.15
General Motors Co GM 33.33 -8.08% 152,764 12,316 106,845 152.27% 8.06% 0.70 8.68 6.72 12.34
Honda Motor Co Ltd HMC 32.22 -6.48% 117,006 13,725 nm 94.65% 11.73% nm nm nm nm
Hyundai Motor Co 005380.KS 121.69 -44.93% 82,266 9,198 74,161 93.45% 11.18% 0.90 8.06 8.60 4.77
Toyota Motor Corp TM 133.75 12.15% 243,687 37,549 nm 114.31% 15.41% nm nm nm nm
Tesla Motors Inc TSLA 268.26 11.91% 3,703 (85) 36,784 375.44% -2.30% 9.93 nm 39.14 nm
Nissan Motor Co Ltd NSANY 20.91 11.00% 103,397 12,882 nm 141.28% 12.46% nm nm nm nm
Peugeot SA PEUGF na na 66,027 4,746 nm 83.36% 7.19% nm nm nm nm
Average 89.29 -4.87% 113,850 12,744 100,068 190.48% 8.99% 3.20 10.81 17.12 11.09
Median 33.33 -6.48% 110,201 11,969 90,503 127.79% 9.68% 1.09 8.68 11.31 12.34
30-Jun
Price
$
52 Week
Perf.
%
LTM
Ent.
Value
$ Mil
Debt /
Equity
%
EBITDA
Margin
%
EV /
Sales
Multiple
x
EV /
EBITDA
Multiple
x
EV /
Nxt Yr
EBITDA
Multiple
x
Price /
Earnings
xCompany Name Ticker
Sales
$ Mil
EBITDA
$ Mil
Traditional Auto Dealers
AutoNation Inc AN 62.98 5.53% 19,690 957 12,233 229.33% 4.86% 0.62 12.79 11.58 16.93
Penske Automotive
Group Inc
PAG 52.11 7.15% 17,706 593 8,848 252.31% 3.35% 0.50 14.93 12.71 14.97
Sonic Automotive Inc SAH 23.83 -10.32% 9,296 285 3,198 295.53% 3.06% 0.34 11.23 10.35 13.42
Group 1 Automotive Inc GPI 90.83 8.72% 10,110 356 4,680 257.86% 3.52% 0.46 13.13 11.76 23.35
Asbury Automotive
Group Inc
ABG 90.62 31.83% 6,054 305 3,938 387.93% 5.03% 0.65 12.93 11.26 22.77
Lithia Motors Inc LAD 113.16 21.22% 6,101 286 4,799 256.84% 4.68% 0.79 16.80 12.50 19.75
Average 72.26 10.69% 11,493 463 6,283 279.96% 4.08% 0.56 13.64 11.69 18.53
Median 76.80 7.93% 9,703 330 4,740 257.35% 4.10% 0.56 13.03 11.67 18.34
Used Auto Dealers
America's Car-Mart Inc/TX CRMT 49.32 24.70% 473 (4) 524 44.83% -0.80% 1.11 nm 9.15 15.18
CarMax Inc KMX 66.21 27.30% 14,533 1,137 23,303 289.68% 7.82% 1.60 20.49 19.61 23.40
Average 57.77 26.00% 7,503 567 11,913 167.26% 3.51% 1.36 20.49 14.38 19.29
Median 57.77 26.00% 7,503 567 11,913 167.26% 3.51% 1.36 20.49 14.38 19.29
Guideline Company Pricing

Sources
“IBISWorld Industry Report 44111: New Car Dealers in the US”
“IBISWorld Industry Report 44112: Used Car Dealers in the US”
“NADA Data” 2002-2014. http://www.nada.org/Publications/NADADATA/.

Mercer
Capital
Auto Dealer Industry
Services
Contact Us
Copyright © 2015 Mercer Capital Management, Inc. All rights reserved. It is illegal under Federal law to reproduce this publication or any portion of its contents without the publisher’s permission. Media
quotations with source attribution are encouraged. Reporters requesting additional information or editorial comment should contact Barbara Walters Price at 901.685.2120. Mercer Capital’s Industry
Focus does not constitute legal or financial consulting advice. It is offered as an information service to our clients and friends. Those interested in specific guidance for legal or accounting matters should
seek competent professional advice. Inquiries to discuss specific valuation matters are welcomed. To add your name to our mailing list to receive this complimentary publication, visit our web site at
www.mercercapital.com.
Mercer Capital has expertise providing business
valuation and financial advisory services to companies
in the auto dealer industry.
Mercer Capital provides business valuation and financial advisory services to auto dealerships
throughout the nation. We provide valuation services for tax purposes, buy-sell agreements,
partner buyouts, and other corporate planning purposes. Mercer Capital also works with owners
who are considering the sale of their dealership or the acquisition of other dealership(s).
Services Provided
• Valuation of auto dealer industry companies
• Transaction advisory for mergers, acquisitions and divestitures
• Valuations for purchase accounting and impairment testing
• Fairness and solvency opinions
• Litigation support for economic damages and valuation and shareholder disputes
Contact a Mercer Capital professional to discuss your needs in confidence.
Timothy R. Lee, ASA
901.322.9740
leet@mercercapital.com
Matthew R. Crow, CFA, ASA
901.685.2120
crowm@mercercapital.com
Nicholas J. Heinz, ASA
901.322.9788
heinzn@mercercapital.com
Chad M. Giganti
901.322.9746
gigantic@mercercapital.com
MERCER CAPITAL
Memphis
5100 Poplar Avenue, Suite 2600
Memphis, Tennessee 38137
901.685.2120
Dallas
12201 Merit Drive, Suite 480
Dallas, Texas 75251
214.468.8400
Nashville
102 Woodmont Blvd., Suite 231
Nashville, Tennessee 37205
615.345.0350
BUSINESS VALUATION &
FINANCIAL ADVISORY SERVICES

Erickson Partners
Merges with Mercer Capital
Mercer Capital, a national business valuation and financial advisory firm specializing in Cor-
porate Valuation, Litigation Support, Financial Reporting Valuation, and Transaction Advisory
Consulting, and Erickson Partners, Inc., a Texas-based Valuation and Litigation Support firm,
announce their merger effective July 1, 2015.
Mercer Capital, with its strong presence throughout the Southeast and Midwest, and Erickson
Partners, with its strong presence in Texas and Oklahoma, are a perfect fit.
Both firms maintain the highest standards of quality for financial analysis and client service and
believe deeply in hiring and developing the best professionals.
“The culture of both firms is so similar and that was important to us. The professionals of Er-
ickson Partners are well-known in the valuation profession as some of the best and brightest.
Their work product and reputation are stellar. This merger not only allows us to broaden our
geographic reach but also our industry expertise,” said Matt Crow, President of Mercer Capital.
Erickson Partners enhances Mercer Capital’s broad base of industry concentrations with their
exceptional history working with and knowledge of professional sports franchises and the en-
ergy sector.
“Over our 30 plus year history, Mercer Capital has developed several industry concentrations. By
adding the knowledge, insight, and expertise of Don Erickson, Bryce Erickson, and the rest of the
professionals of Erickson Partners, we now bring deep experience and insight to a broader range
of industries than we could as separate firms,” said Chris Mercer, CEO of Mercer Capital.
“Combining with Mercer Capital, we will now be able to offer new or expanded services that
complement our existing services, as well as additional industry expertise,” said Bryce Erick-
son, Managing Director of Erickson Partners. “In addition to our sports franchise and energy
industry concentrations, we will be able to offer deep industry concentrations in construction
and building materials, agribusiness, manufacturing and financial institutions, which includes
depository institutions, insurance companies, fintech companies, asset management firms, and
PE firms.”
“The combined firm will have over 40 valuation professionals positioned in five markets through-
out the southwest and southeast. Such a deep bench will provide us with a tremendous op-
portunity to better serve the expanding needs of our clients,” said Don Erickson, President of
Erickson Partners. “Joining with Mercer Capital gives us national resources that will benefit our
clients in Texas and beyond.”
About Mercer Capital
Mercer Capital is a national business valuation and financial advisory firm offering corporate valua-
tion, litigation support, financial reporting valuation, and transaction advisory consulting services to
a national client base. Clients include private and public operating companies, financial institutions,
asset holding companies, high-net worth families, and private equity/hedge funds.
About Erickson Partners, Inc.
Erickson Partners is a professional valuation and advisory firm specializing in business valuation,
litigation support, financial investigations and strategic corporate advisory services. Founded by
Don & Bryce Erickson, Erickson Partners has served large and small clients by providing complex
financial and economic analysis, leading to reasonable valuation opinions that withstand scrutiny.
BUSINESS VALUATION &
FINANCIAL ADVISORY SERVICES
CONTACT US
Z. Christopher Mercer, ASA, CFA, ABAR
901.685.2120
mercerc@mercercapital.com
Matthew R. Crow, CFA, ASA
901.685.2120
crowm@mercercapital.com
Donald Erickson, ASA
214.468.8400
ericksond@mercercapital.com
Bryce Erickson, ASA, MRICS
214.468.8400
ericksonb@mercercapital.com
MERCER CAPITAL
Headquarters
5100 Poplar Avenue, Suite 2600
Memphis, TN 38137
901.685.2120
Dallas
12201 Merit Drive, Suite 480
Dallas, TX 75251
214.468.2120
Nashville
102 Woodmont Blvd., Suite 231
Nashville, TN 37205
615.345.0350
COMBINING
CULTURES OF
EXCELLENCE

Mercer Capital's Value Focus: Auto Dealer Industry | Mid-Year 2015

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