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Terry Taylor is the nation's largest private owner of automotive dealerships
Terry Taylor doesn't care if you know about him. He prefers it that way.
Petrello didn’t return the stock, according to court records, and alleged that Taylor funneled money from the dealership to his own company to profit himself and to lower the dealership’s value — and the value of Petrello’s shares.
For the years in question, Petrello said, the dealership paid inflated fees of $35,000 a month to Taylor’s Automotive Management in West Palm Beach, $15,000 to another Taylor company and $30,000 a month in inflated rent — $4.3 million over the years. In addition, the suit claimed, Petrello had to use Taylor’s finance and insurance company, West Palm Beach-based Total Warranty Services. Petrello claimed Taylor has a pattern of forcing out GMs at artificially deflated prices. The case settled last year, with terms undisclosed.
As that case unfolded in court, Taylor’s attorney, Hal Litchford of Baker Donelson, fought to keep secret exactly how many dealerships Taylor owns, saying Taylor viewed that information as “highly proprietary.”
With automotive experts predicting further consolidation in the industry, Taylor may acquire even more dealerships. According to Kerrigan Advisors, the nation had some 40,000 dealership owners in the 1930s; in the 2010s, the number of third-generation owners was down to 8,000. Publicly held companies own just 8% of the nation’s dealerships, and the rest of the 150 largest dealers own only another 14%. The remainder of dealerships are owned by small groups and families.
Owning a dealership has become increasingly expensive, which will force some dealers to assess whether they want to persevere or cash out, says Cliff Banks, publisher of industry newsletter the Banks Report. The industry is cyclical, and “the margin on new cars has become razor thin, if not below that,” Banks says.
The ranks of consolidators include public giants like AutoNation, Warren Buffett’s Berkshire Hathaway, George Soros, private equity firms, high-networth individuals and family offices of the likes of Michael Dell.
Taylor without doubt is closer to the end of his career than the beginning — though his father lived to 91 — and he’s not talking about his plans. Sabates says a private equity firm with deep pockets asked him to set up a meeting with Taylor to discuss a sale. “He wouldn’t even listen to a number,” Sabates says. His prediction: If Taylor ever sells, it will be to his partners.
Another prediction: “If you meet him, he would be a charmer.”
Read more in Florida Trend's July issue.
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