Can You Write Off Your Home Garage as a Body Shop Owner?

If you own a collision repair facility, you likely do some repair work in your home garage; perhaps, you even use your garage as a home office. Great news – you may be able to claim a home office deduction on your taxes, but there are a lot of variables. First, the extent to which Read more about Can You Write Off Your Home Garage as a Body Shop Owner?[…]

Caliber Collision Acquires ABRA Auto Body

The long-awaited deal between Caliber Collision and ABRA Auto Body has finally been announced. The combined company now boasts over 1,000 stores with combined estimated revenues near $3.5 billion. This should come as little surprise to long term readers of my insights, and I suggested as much here and here, and here. It was only Read more about Caliber Collision Acquires ABRA Auto Body[…]

I attended the MSO Symposium at NACE Automechanika and this is what I learned

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 Read more about I attended the MSO Symposium at NACE Automechanika and this is what I learned[…]

Service King is for sale, Caliber takes on a new equity partner, CCC looks for a buyer – Private Equity in Collision Repair

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…

How Do You Stack Up? Comparing your business to the majors.

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 Read more about How Do You Stack Up? Comparing your business to the majors.[…]

Lean Will Save the Industry…Or Will It?

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 Read more about Lean Will Save the Industry…Or Will It?[…]

The Consolidation Curve

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. […]