As 2025 begins, many RV dealer owners are considering major business changes. Many will consider selling or buying businesses in the coming months. To assist dealers in taking this step, industry experts gathered to host a webinar on the market and share tips for a smooth and successful transition.
According to Jesse Stopnitzky, co-owner and RV Division director at Performance Brokerage Services (PBS), the company facilitated 94 dealership transactions in 2024. The company services the RV, marine, powersports, automotive and commercial truck industries. The total surpasses its 92-sale record in 2022.
While Stopnitzky said many dealers are considering selling, others are taking a “wait-and-see approach.” Regardless, Stopnitzky said the best time to sell is “when you are ready, and it accomplishes your business and your personal goals.”
He said PBS anticipates more acquisition and merger activity in 2025.
Brad Stanek of The Stanek Group at Morgan Stanley said dealers cannot rely on the economy alone to significantly increase business.
He said, “It is up to you to be able to step in and to take what is a reasonable, but not free, economy (and) turn that into a win through actions that you take to control and grow your business and the value of the dealership.”
How to Value Your Business
Stopnitzky and the webinar’s other speakers shared best practices for dealers preparing to sell their business.
Stopnitzky said valuing an RV dealership is most often performed by using the earnings value approach.
Dealerships first calculate their earnings before interest, taxes, depreciation and amortization (EBITDA). This total is then adjusted.
“As sole proprietors, it is common for dealers to expense through the business, non-dealership-related or non-operation-related expenses such as travel and entertainment, excess salaries for family members and absentee wages,” he said. “We also want to factor one-time expenses like relocation, remodeling equipment, purchases and legal settlements. Further, we want to ensure that the dealership is paying fair market rent as it relates to the value of the property.”
Adjusting EBITDA reveals the business’ true profitability. Stopnitzky said the next step is compiling this information for the number of years being analyzed, which he said can go back as far as 2018.
Once the adjusted EBITDA is averaged over the time period, valuators apply a multiple of earnings. Stopnitzky said the industry average is between two times and four times earnings. The determination is based on tangible and intangible variables, brands, market size, location, acreage, facility, capex, history, reputation management, performance and more.
The last consideration is which asset components are included in the multiple. Stopnitzky said his company uses the multiple for the company’s goodwill portion only, although many buyers include furniture, fixtures and equipment. Some include parts and accessories, but he said those should be considered case by case.
“It is critically important to recognize that the value cannot be determined solely based off of track record,” he said. “Instead, it needs to be a combination of your historical adjusted earnings, the buyer’s projected earnings and the buyer’s desired return on investment.”
Buyers will use historic earnings to build their own forecast and projections of future sales and profits. This value, he said, is the business’ final value—the return buyers expect based on their projections.
He said navigating the calculations through the pre-pandemic and post-pandemic world is challenging.
“In 30 years in business, we have never seen fluctuations in profitability like we have today,” he said. “The crux of our valuations is determining which areas of the business underwent systemic and sustainable growth and which areas were solely attributed to Covid.”
Clear Systems, Smooth Sales
The more organized and concise dealer operations are, the more prepared the company will be to go to market. Stopnitzky said he strongly encouraged sellers to sell through their aged and unfavorable inventory. In his experience, high aged-inventory levels can make or break deals.
Blue Compass Senior Vice President of Corporate Development Raul Rodriguez echoed inventory’s importance. He said the dealer chain walked away from businesses where the aged inventory levels were too high to pursue.
Stopnitzky recommended seeking guidance from brokers and other players during the process.
“Buyers are more inclined to evaluate an acquisition that is well-presented and well-represented by professional and experienced advisors,” he said, “because this gives them the opportunity to engage in a more seamless transaction.”
Stanek suggested seeking guidance through a financial advisor.
Financial advisors can support dealers in navigating the deal’s legal, tax and investment aspects. Stanek said advisors should be financial planner-certified to assist dealers in all areas outside liquidated assets. The ideal advisor should have dealership-sale experience. Once dealers have a financial advisor, Stanek said there are three key planning stages.
The pre-planning phase should include a detailed meeting when the dealer shares their transaction goals with advisors. The meeting should cover what the dealers want and what they need from the sale. Advisors can assist in calculating how much dealers could walk away with from a deal. Stanek advised not to go to market without this step.
Planning during the deal, Stanek said, should involve the certified financial planner, making sure everyone is on the same page.
Planning after the deal closes involves investing the proceeds. Before the deal closes, financial planners can assist with tax planning to maximize investment revenue.
A Buying Dealer’s Perspective
Rodriguez has been with Blue Compass since its inception in 2018. He led many of the dealer chain’s successful acquisitions. He said Blue Compass seeks quality and premium RV brands from dealerships considering a sale.
“It is not about just adding dots across the country,” he said. “It is adding businesses that we think fit from a market, brand, facilities, culture, management perspective—and it has to fit all that criteria before we get even to a valuation discussion.”
The dealer chain also looks at the seller’s management and leadership. If a business does not have a leadership team aligned with Blue Compass’ values, Blue Compass may not pursue the acquisition.
While the dealership prefers to acquire companies that own land, it does consider sellers with a lease.
Rodriguez said he anticipates doubling Blue Compass’ size in the next three to five years.
