Firm invests $70M into Northeast dealership group

The deal with Georgica Automobile is Franchise Fairness Partners’ very first expense in dealerships, mentioned Don Reese, CEO of the firm’s automotive unit and a former leader of made use of-car retailer DriveTime. LaNeve, a previous Ford Motor Co. and Common Motors sales and promoting govt, is chairman of that unit.

Franchise Fairness Partners explained very last November that it aimed to expend close to $400 million on minority stakes in automobile dealerships all through a a few-yr interval.

Sobel and Reese declined to disclose Franchise Equity Partners’ percentage stake in Georgica Vehicle but confirmed “it is a minority stake.”

“Jon’s in essence our Northeast dude, and we would like to carry on to develop with him in the Northeast,” Reese reported. “And we are searching to do that in other components of the country.”

Sobel described Georgica Car as a recently formed entity created to aid the transaction with Franchise Equity Companions. Georgica Vehicle has dealerships throughout New York, New Jersey and Pennsylvania. Sobel’s portfolio of dealerships signifies domestic, import and luxurious manufacturers.

Sobel famous that one particular of his retailers, Jaguar-Land Rover Manhattan, now has a minority spouse and, as a consequence, is independent from Georgica Car and Franchise Equity Partners’ investment.

Franchise Equity Associates is backed by New York financial commitment agency HPS Investment Associates. HPS allocated $1 billion to fund Franchise Fairness Companions, which targets investment in five spots: auto dealerships, places to eat, heavy-equipment dealerships, beverage distributors and purchaser services these kinds of as wellbeing and beauty.

Franchise Equity Associates was co-founded by Michael Esposito and Scott Romanoff, who are the firm’s handling companions. Both Esposito and Romanoff are former companions at Goldman Sachs. That connection was crucial to this very first deal as Sobel, also a former Goldman Sachs partner, understood the pair.

“It appeared like a extremely rational expense for them,” Sobel explained. “And they appeared like a wonderful strategic partner for me.”

Reese explained Franchise Fairness Companions is doing the job on other investments but declined to talk on specials that are in system.

“Our offer movement has been pretty energetic,” Reese stated.

Northeast progress

Sobel claimed he has not purchased or bought any dealerships so considerably in 2022. But the deal with Franchise Fairness Associates follows an energetic 2021 for him in the invest in-promote sector.

Sobel sold Alfa Romeo of Manhattan-Maserati of Manhattan and Chrysler-Dodge-Jeep-Ram-Fiat of Manhattan in New York to Dennis & Co. Vehicle Group in December.

In July 2021, Sobel purchased two Audi dealerships and a Porsche retail store in suburban Philadelphia. Sobel also bought a Chevrolet-Buick-GMC dealership in the central New York town of Auburn that summertime, he observed, which adopted the acquisition of a few Auburn suppliers in February 2021.