After acquiring seven car dealerships in the past two years, Twin Cities Automotive, owned by Pohlad Cos., is expanding its business in snowmobiles, motorcycles and off-road vehicles.
Twin Cities Automotive, based in Minnetonka, said Wednesday it is acquiring Delano Sports Center in Delano, Minn., for undisclosed terms, and will combine it with its existing recreational vehicle business there called Star West Motorsports.
Twin Cities Automotive entered the recreational vehicle market through last year's purchase of Star West Chevrolet of Delano, since renamed Chevrolet of Delano, which operated Star West Motorsports as a sideline business.
By acquiring Delano Sports Center, Twin Cities Automotive adds the recreational brands Polaris, Victory Motorcycle and KTM to Star West, which already sells Honda, Arctic Cat and Yamaha motorcycles, all-terrain vehicles, personal watercraft and snowmobiles.
While Twin Cities Automotive has been pursuing growth through car dealership acquisitions, its push into motor sports is a bit more tentative.
"We acquired our first motor sports business in November 2012, when we bought Star West Chevrolet," Brad Braun, the company's chief financial officer, said in an interview. "At that time we were not actively looking for motor sports dealerships, but we thought there might be some synergy, some cross-selling opportunities with the car business that made sense. We're exploring that now."
He said the purchase of Delano Sports Center "made sense because with it came the Polaris brand, which has a 50 percent share of the recreational motor sports business in Minnesota."
The recreational vehicle deal is overshadowed by the growth in the company's car business. Twin Cities Automotive, which two years ago had four dealerships selling BMW, Hyundai and Chrysler vehicles, has since bought seven dealerships. They include two Audi dealerships in Minneapolis and St. Paul, two Porsche dealerships in Minneapolis and St. Paul, a Mercedes dealership in Maplewood and two Chevrolet dealerships in Delano and North Branch, Minn.
"There's a lot of activity in mergers and acquisitions in the auto dealer business, because vehicle sales have improved fairly dramatically since 2010, with more cars being sold after the recession," Braun said. "We do expect to grow through acquisition, but you never know when those deals are going to happen."