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Opinion: The State of the M&A Market

A picture of Scott Degnan, partner at RV Business Solutions, an RV industry M&A brokerage firm.

As 2024 draws to a close, the RV industry looks back at a year of challenges and opportunities. The dealer mergers and acquisitions (M&A) market, in particular, has been a captivating space to watch.

Businesses have had to stay sharp, adapting strategies on the fly, much like a seasoned golfer navigating a tricky course. With three-quarters of the year now behind us, this is an ideal moment to assess our position and plan the best approach moving forward.

Reflecting on a Year of Caution

This year emphasized that change is the only constant in the RV dealership M&A market. The RV industry is not for the faint of heart, which 2024 proved again. Lingering effects from the pandemic and aged inventory created a landscape of caution and opportunity.

Big-box retailers, typically juggernauts, eased off the gas, showing less aggression. Meanwhile, smaller to midsized dealers saw this as an opening to expand, seizing assets at perceived bargain prices.

Top-tier product lines, service capabilities and large usable acreage remained critical drivers for most buyers. Fair valuation and a strong leadership team willing to stay post-sale sealed the deal. Leadership teams are crucial. Buyers are not just purchasing assets but investing in people who can make those assets thrive. Buyers want stability and the promise of continued growth post-acquisition.

Although we saw fewer total acquisitions in 2024, more occurred than may appear at first glance. Smaller to midsized dealers have quietly captured distressed, single-location dealerships to build their portfolios. Dealers that were less attractive to the larger buyers worked in smaller acquirers’ favor. Regional buyers looking to build dominance in local markets snapped up these opportunities. The regional market consolidation trend will likely continue into next year.

Projections for 2025

Looking ahead to 2025, the RV dealership M&A market is poised for strategic consolidation and selective expansion. We anticipate several key trends to shape the landscape.

First, larger dealer groups are expected to become more active again, widening their national footprint and locking up key markets, key states and key product lines through strategic acquisitions. In other words, the bigger will get bigger. Plus, these dealers are looking to expand their service offerings through increased locations with more service capabilities.

Think of this as a game of Monopoly—the more properties you own, the stronger your position. Unlike Monopoly, the stakes are much higher, and the strategies are far more nuanced.

Midsized dealer groups seeking top-tier product lines or access to additional markets will continue to grow in 2025. However, finding such dealerships is becoming increasingly complex and expensive. The challenge here will be to balance expansion with financial discipline as premium targets become scarce. The payoff could be substantial for those able to navigate this competitive environment. Midsized dealers that maintain their agility will find opportunities others might overlook.

Increased Private Equity Activity

Second, private-equity firms are set to play a more significant role in 2025. With ample capital and a focus on growth, they will target dealerships with solid financials and scalable models. Our Flagship Fund, specializing in the RV industry, is well-positioned to drive this trend.

Private-equity firms are not just seeking good deals—they are looking for the right ones. They want dealerships with the potential not
just to survive but to thrive.

We anticipate a surge in cross-border M&A activity as international investors recognize the RV industry’s growth potential. Global investors with automotive or outdoor lifestyle market expertise may look to establish a foothold in the U.S. RV sector. In addition, ESG (Environmental, Social, and Governance) funds could begin targeting dealerships that align with sustainability goals.

This trend could significantly influence valuation and acquisition strategies in the coming year.

Focus on Digital Integration: The Tech Revolution Rolls On

Third, digital technology integration will become increasingly vital in M&A activity.

Dealerships that have embraced digital sales platforms, CRM systems and online marketing strategies will be more attractive acquisition targets. A robust digital presence is not just an advantage but a necessity.

Navigating today’s business landscape without technology is like driving an RV through a mountain pass without power steering—not fun and certainly inefficient.

Green Is the New Gold

New regulations, especially environmental and emissions standards, will also shape M&A strategies. Dealerships aligning with the growing demand for eco-friendly RVs and sustainable practices will command higher valuations.

The shift toward green technology is not just a trend but a movement that is here to stay. RV dealerships that adapt quickly will find themselves ahead of the curve, leaving competitors in the dust.

Sustainability will be crucial in how dealers position themselves in the market. Dealerships that proactively adopt green initiatives—such as offering electric RV models or incorporating green building practices into their operations—will be viewed as forward-thinking and responsible. This strategy positions them well with buyers looking to align with brands prioritizing environmental impact.

Advice for Dealers and Industry

Given these projections, dealers and industry players can prepare and capitalize on 2025’s opportunities as follows:

Ensure Your Financial Readiness:
Get your house in order. If you want to sell your dealership in 2025, you must review your financial statements, including income statements, balance sheets and cash flow projections.

Identify areas for improvement and implement strategies to maximize profitability. A potential buyer will scrutinize your financials, so transparency and accuracy are paramount.

Strengthen Your Digital Presence:
Ensure your dealership has cutting-edge digital tools. A strong online presence enhances customer engagement and increases your attractiveness to potential buyers.

Think of your website as your virtual showroom—first impressions count.

For example, your website should post at least 20-25 pictures for every RV in your inventory—yes, even the used RVs.

This small investment leads to a much greater return. This is 100% within your control. So, do this immediately when the unit arrives at your dealership.

Upgrade Your Product Lines: If you are not carrying a top-tier OEM product line, rethink your strategy.

RV dealerships with industry-leading product lines are more sought after, sell faster and garner higher values. In today’s market, premium products are king, and customers are willing to pay for the best.

You must get to work if those product lines are tied up in your market. Go to RVDA and Open House to build relationships with those OEMs and stay after them.

Will they be rolling out a new line? Is there a startup that will sign you up? Can you drop other lines to attract those top sellers? If you have multiple locations, will you put those products in all your stores?

The bottom line is that product lines are always at the top of the list regarding your dealership’s attractiveness to both customers and potential suitors.

Evaluate Your Operational Efficiency: Streamline operations and focus on profitability.

Buyers are looking for dealerships with optimized supply chains, reduced overhead and solid financial performance. A well-oiled machine not only runs better but also lasts longer.

Consider Strategic Partnerships: Explore partnerships with complementary businesses, such as RV accessory manufacturers, to
enhance your value proposition.

Strategic alliances can make your dealership more appealing as an acquisition target. Sometimes, what you know is not what makes the difference, but who you know does.

Stay Informed on Regulatory Changes:
Keep on top of new regulations that could impact your business. Early environmental and legal standards adaptation can position your dealership as a sustainability leader, attracting forward-thinking investors.

Build a Strong Leadership Team: Retaining a capable leadership team post-sale is often key for buyers.

Invest in leadership development to ensure your team is prepared to guide the business through a transition. After all, a company is only as strong as its people.

Conclusion: The Road Ahead

As we look forward to 2025, the RV dealership M&A market is set to evolve. Strategic planning, operational efficiency and adaptability will be crucial for dealers that aim to thrive.

As we gear up for another year, let’s keep our eyes on the ball, line up our shot and swing confidently. The fairway may be challenging, but with the right strategy, we are all set for a shot at hole-in-one.

 

Scott Degnan brings over 30 years of experience in the RV industry. His career includes leadership roles at Winnebago Industries as vice president of the Motorhome Division and president of the Towable Division.

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