Calgary's Foundation Automotive acquires Colo. Hyundai store from AutoNation

Rapidly growing Canadian dealership group Foundation Automotive Corp. has acquired a Hyundai store in Colorado from auto retail giant AutoNation Inc.

The acquisition, Foundation's first Hyundai dealership, is just one of the more than a dozen U.S. dealerships the group hopes to acquire this year.

Foundation Automotive, based in Calgary, on Wednesday bought AutoNation Hyundai 104 in Northglenn, Colo., north of Denver.

Cole Kutschinski, Foundation's vice president of marketing, said the group approached AutoNation about whether it would be willing to sell the dealership.

"We've been speaking with Hyundai for some time looking at different opportunities," Kutschinski told Automotive News. "They said that it might be available. So we approached and it worked out."

Part of the agreement required Foundation to move the Hyundai store to a different building, a former AutoNation dealership, about two miles away in Westminster, Colo. AutoNation Hyundai 104 closed on Wednesday and Foundation is moving inventory, parts and tools to the Westminster location.

Other terms of the deal were not disclosed, but the store has been renamed Foundation Hyundai.

Foundation will rent the building from AutoNation but is looking for land to build an image-compliant facility, Kutschinski said.

"They've been really great at the leasehold improvements in getting it ready to move in this week," Kutschinski said of AutoNation. "We open up for business on Monday, [May 24]."

The previous Hyundai dealership is being turned into an AutoNation USA location, Kutschinski said. In April, AutoNation said it plans to expand its used-vehicle-only AutoNation USA business to more than 130 stores by the end of 2026.

Foundation, which now has a U.S. office in Houston, formed in 2017. It acquired its first U.S. dealerships in 2019. Kutschinski said Foundation uses a partnership model in which the group owns up to 75 per cent of a dealership while an operating partner owns up to 25 per cent.

Josh Letis, managing partner of the group's Medved Autoplex — which includes Cadillac, Chevrolet and Kia stores in nearby Wheat Ridge, Colo. — will also be managing partner at the Hyundai store.

The Hyundai dealership is Foundation's 20th store overall. Foundation acquired a Chrysler-Dodge-Jeep-Ram store in North Vancouver, British Columbia, in September and in December opened a new Mitsubishi point in Houston.

The group has three dealerships in Canada and 17 in the United States across Colorado, North Dakota, Ohio and Texas. It also owns a commercial truck upfitting center in Texas.

Foundation, led by CEO Kevin Kutschinski, Cole's father, is aiming for aggressive growth in 2021. The group plans this year to acquire between 16 to 18 additional dealerships, which would nearly double its store count.

Cole Kutschinski said those acquisitions will be in the U.S. Foundation does have some deals under contract, but Kutschinski declined to disclose details.

"We want to keep increasing our footprint," Kutschinski said. "We've been looking at a ton of opportunities. We're looking at any opportunity, honestly. For us, I think, primarily it makes sense to cluster our stores together."

Foundation is looking to expand into California, Washington, Florida and South Carolina and grow its presence in Denver and Colorado, as well as north Texas. The group, which has domestic, Japanese and Korean mass-market brands, also is looking to acquire luxury brands, Kutschinski said.

Dealer Solutions Mergers and Acquisitions, a buy-sell firm based in Markham, Ontario, represented Foundation in the Hyundai transaction. AutoNation did not use a broker.