Group 1 growth in 2023 could slow due to high interest rates

One factor that could slow the pace of acquisitions is rising interest rates. Kenningham acknowledged that rate hikes have increased the cost of capital for making acquisitions.

“You have to be careful because your cost of money creates a different return model that you have to be cognizant of,” he said. “We are seeing the valuation soften a little bit as a result, and I think some of the sellers realize that.”

Kenningham told Automotive News after the forum that he envisions making acquisitions in both the U.S. and the United Kingdom, Group 1’s current markets. But he added that U.S. deals will be a priority.

While Group 1 has no acquisition deals in the pipeline that Kenningham was willing to comment on, there is “always stuff floating around,” he said.

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