Last week I was in Chicago for NACE Automechanika. NACE is one of the largest trade shows dedicated to the collision, mechanical and automotive service industries in North America. It is a great show to connect with leaders in the industry, and as is normally the case, my day was filled to the brim with[…]
After a relatively quiet 2016 where few equity transactions were announced, 2017 is off to a rapid start. Just weeks ago I predicted exactly this – that we would see additional consolidation at the highest levels, additional investors (i.e. private equity) doing deals, and a focus on large deals in 2017. Here are three…
In the past I have discussed the importance of developing a strategy and the implications consolidation has on your business. A big part of strategy, whether it is stand pat, buy or sell to understand what your competitors are up to. For this reason I am also often asked to present to industry groups about[…]
Increasing vehicle complexity and OEM involvement are increasing the cost of doing business in the collision industry. Capital requirements are increasing. More training, more tooling, and more equipment is needed to compete in today’s environment. The result is lower margins. Decreasing profitability is a trend that has been taking place for some time in the[…]
What will happen in the collision industry in 2016? Is now the right time to sell or to grow? Here are 3 predictions that may influence your decision.
The industry is consolidating. That statement probably comes as little surprise. The entire automotive aftermarket is consolidating. Dealers, tire vendors, parts distributors, paint distributors, software providers are all consolidating. But were you aware that industries tend to follow a predictable path of consolidation, referred to as the consolidation curve?
Big companies are acquiring smaller companies using affordable capital to grow. This growth creates economies of scale. And economies of scale allow larger companies to provide goods and services relatively more efficiently and at a lower cost than their smaller competitors.
Consolidation will continue because it is a virtuous cycle where success attracts additional investment that generates further business advantage. A growing consolidator will continue to acquire for two main reasons. […]