In the past, he’s rebuffed interest from AutoNation Inc. and Penske Automotive Group Inc. because the timing wasn’t right, Chambers said.
Dealer Profits
Auto conglomerates as well as investors including George Soros are interested in acquiring large dealers, said Mark D. Johnson, president of MD Johnson Inc., a Seattle-based automotive mergers and acquisitions firm. U.S. annualized auto sales are up 70 percent from their 2008 low. Dealer count totals 17,000, half the number when Chambers began in 1984.
"Dealer profitability is at an all-time high and Chambers has big, profitable stores," said Johnson. Half of his locations sell higher-margin luxury brands such as Lexus and BMW. All are within 75-miles of Boston, the sixth-wealthiest city in the country.
"The level of concentration is going to bring a premium, just like Van Tuyl did," said Johnson, who estimated Buffett paid about a 20 percent premium.
Copier Sales
Chambers became fixated on cars as a 10-year old boy, when a 1953 Skylark appeared in the window of a Buick dealer in his native Dorchester, a blue collar part of Boston. Each day for a month Chambers would ride his bicycle to admire the car, until it was gone.
His business career started as a copier salesman at age 22 following a stint in the Navy. Chambers built his firm, A-Copy America, into the largest copier dealer around. He sold it for about $80 million in 1983 and it’s now the Ikon division of Ricoh Co. Ltd.
A year later, Chambers went shopping for a Cadillac in New London, Connecticut, and was so disgusted with the experience he made an offer to buy the business for $1.7 million on the spot. He needed something to do, he said, and figured improving customer service would boost sales. He was the first dealer to clean cars when they came in for service, he said, industry standard now.
Within a year Chambers added Hyundai, Porsche, Mercedes and BMW franchises. Today, in addition to the $300 million of inventory on his lots, the billionaire’s personal car collection includes a 1953 Skylark.