The landscape of the Auto Dealership Industry is in the midst of seismic changes. The relationships with the OEMs and consumers are evolving at a rapid pace and the long-term players will need to invest to stay relevant to their suppliers and customers. Affordability and supply chain challenges also seem likely to remain in the center of the conversation around car sales for the foreseeable future. For those operators who are skeptical of their long-term position, there may be no better time to consider an exit as capital remains robust and many large players are committed to expanding their footprints through acquisitions to achieve their lofty growth objectives. … [Read more...]

Marketing Technology, also known as MarTech, describes a range of software and tools used in marketing and is an estimated $149.7 billion industry in the U.S. and the U.K., broadly defined. MarTech assists with marketing workflows, customer acquisition and retention, brand and communications, content and social, and data and analytics. There are over 4,000 companies providing marketing technology in the U.S. In that universe, Colonnade estimates that 2,500 are companies exclusively focused on MarTech. … [Read more...]

Automotive reconditioning is the process of preparing a vehicle at a dealership to be retail-ready. All new and used cars go through reconditioning before being put on the dealership lot. Services include wheel repair, exterior repair, paint, paintless dent repair (PDR), interior restoration, and detailing services. Many dealerships outsource reconditioning to optimize operations and decrease inventory turn-times. … [Read more...]

Today, marketers are searching for innovative solutions to break through the noise to reach consumers in meaningful ways. In this COVID-19 environment, more consumers are at home to receive mail and phone calls and browse digital materials aimed toward customer acquisition. The lead gen industry now totals $26 billion, up 18% over 2018. The digital segment is growing faster (up 33% year over year) than direct mail and represents more than 60% of the overall lead gen market. The emphasis on digital lead gen solutions indicates that data analytics, rather than the data itself, is where the value lies. Companies that provide high value data analytics and tools are increasingly valuable and … [Read more...]

The current pandemic has sent the automotive industry and other large segments of the economy into a period of turmoil and uncertainty. Economic recovery could be slow, and new car sales are forecast to decline by 26% in 2020. Certain services segments of the automotive industry, such as auto inspection and warranty claims management, however, may be insulated from a broad recession. As the economy gets back to work, the frequency of motor vehicle accidents will rise, and mechanical breakdowns will return to pre-crisis levels. … [Read more...]

The U.S. lead generation (“lead gen”) agency industry has been experiencing significant merger and acquisition activity driven by a high degree of fragmentation, specialization, strong cash flows, and a growing underlying lead gen market. In a recent survey, 70% of marketers say their lead gen budgets will increase and 34% say their spending will grow by more than 20%. Direct mail, contrary to expectations in the new economy, is performing the best since 2003. Digital advertising now represents almost half of the $208 billion spent on advertising. … [Read more...]

The vehicle service contract (VSC) industry continues to attract significant interest among investors and consolidators. Macro fundamentals are compelling, and the industry demonstrates growth, strong margins, and recurring cash flow. The industry value chain includes administrators, F&I agencies, direct-to-consumer marketers, payment plan providers, and specialty insurance carriers. In 2018, the industry was $35 billion at retail with significant opportunity for growth; there were 132 million vehicles that did not have a VSC but were eligible. Since 2010, more than 60 companies in the VSC industry have changed ownership. … [Read more...]

Contact center operations (“CCO”) are an integral operational component of service companies. CCOs handle a range of critical functions, including customer service, telemarketing, technical support, and debt collection. CCOs are utilized across several industries, from insurance and financial services to technology and telecommunications. Some business models, such as direct-to-consumer vehicle service contract (“VSC”) sales, are entirely dependent on contact center operations to originate sales and provide customer service. Players in the VSC sector, as well as several other industry verticals, are currently “in-house” their contact center activities, presenting a compelling growth … [Read more...]

The vehicle service contract (VSC) industry continues to attract significant interest among investors. Macro fundamentals are compelling, and the industry demonstrates growth, strong margins, and recurring cash flow. The industry value chain includes administrators, F&I agencies, direct-to-consumer marketers, payment plan providers, and specialty insurance carriers. The industry totals $33 billion at retail and comprises a large and important component of automotive sales and profitability. Since 2010, more than 40 companies in the VSC industry have changed ownership, and we expect sellers to continue to benefit from strong demand among financial investors and strategic buyers for … [Read more...]

The healthcare linen rental industry is attractive to private equity and strategic buyers. A recent flurry of M&A activity indicates continued inflows of capital to the sector and acquisition activity. The industry is fragmented, companies have predictable recurring cash flows at 10%-15% EBITDA margins and opportunities exist for margin enhancements in consolidation (or privatization) transactions. … [Read more...]

The F&I products industry is attracting significant interest as the macro drivers are compelling and the industry demonstrates high growth and margins. The F&I products industry totals $77 billion at retail and comprises a significant and valuable part of the U.S. automotive industry. The value chain includes administrators, F&I agencies, direct-to-consumer marketers, payment plan providers, and specialty insurance carriers. Since 2011, more than 30 companies in the F&I products industry have changed ownership, and we expect sellers to continue to benefit from strong demand among financial investors and strategic buyers for well-run businesses in the sector. … [Read more...]

The vehicle service contract (VSC) industry totals $29.4 billion at retail and comprises a large and important component of automotive F&I sales and profitability. The industry value chain includes direct-to-consumer marketers, auto dealers, administrators, payment plan providers, and specialty insurance carriers. This large group of firms provides many compelling investment opportunities. The industry has been growing and generates strong returns and earnings growth for investors. Recent M&A activity indicates strong investor demand. … [Read more...]

The U.S. insurance distribution market continues to consolidate, and valuations are rising. Although the absolute number of transactions declined in 2013, the number of large deals and the valuation metrics of significant, well-run agencies and brokerages increased markedly. Improved operating performance, a rebounding U.S. economy, and an influx of capital from private equity investors have driven transaction multiples above pre-crisis levels. Stronger P&C pricing is also a factor behind the uptick in agency transaction multiples, as buyers are factoring in a firming market into their valuation calculations. … [Read more...]

A rebounding automotive sector and a modest recovery of the U.S. economy have driven significant growth in the market for vehicle service contracts (aka extended warranties). … [Read more...]

Insurance agents and brokers in the U.S. are benefitting from the beginning of a long-awaited hard market, a slowly improving U.S. economy, and increasing complexity in the health and benefits markets. Consolidation – long a path for revenue growth in the industry – continues at a heated pace, as strategic buyers and private equity-backed players rush to grab share ahead of rising P&C pricing. Additional private capital is eagerly seeking entry, providing a floor on valuations. Insurance agents and brokers with revenues in excess of $30 million are in high demand, allowing acquirers to efficiently add scale, augment leadership, extend the geographic reach and increase product breadth. … [Read more...]