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Letter to the Editor
Thursday October 25
Caliber Collision Centers Completes $40 Million Financing
IRVINE, Calif. -- Caliber Collision Centers, an Irvine-based operator of collision repair centers in California and Texas, has announced that Zurich Financial Services Group, Keystone Inc., an affiliate of Oak Hill Capital Management Inc. and The Interinsurance Exchange of the Automobile Club have invested $40 million in Caliber's Series E Preferred Stock.
This investment will further Caliber's effort to provide high-quality, cost-effective collision repair services to its client base consisting of leading auto insurance companies and consumers. Caliber will continue to acquire and develop centers in its existing markets, while exploring expansion opportunities in other geographic regions.
The $40 million investment follows a $20 million investment made by BNY Capital Partners L.P. and The 1818 Mezzanine Fund in August of 2000.
"I am very pleased to have The Interinsurance Exchange of the Automobile Club join the other highly regarded firms investing in the success of Caliber Collision Centers," stated Matthew Ohrnstein, CEO and chairman of Caliber.
"This investment affirms the continued commitment of our existing investors and the confidence that the insurance industry has in our ability to consistently provide service, quality and price that differentiates Caliber from the collision repair industry norm. This $40 million investment will enable our company to continue executing its business plan into the foreseeable future."
Jim Gilmartin, senior vice president of The Interinsurance Exchange of the Automobile Club believes the investment in Caliber will provide policyholders with access to high-quality collision repair through Caliber's continued participation in the Exchange's Immediate Repair Program (IRP).
"The Interinsurance Exchange's IRP service option is made available to those policyholders and claimants who request a referral for vehicle repair," said Gilmartin.
"While we will always support our customers' right to select a repair facility of their choice, we find that many of our policyholders and claimants request a referral for collision repair. Our IRP program provides a number of pre-screened, quality repair facility choices for our clients. Ensuring Caliber's continued participation in this service focused program will benefit our customers," Gilmartin added.
"Caliber is the largest collision repair business in the US with 34 locations in Southern California and 28 in Texas," said Bill Lawrence, Caliber's president and COO.
"Our scale enables us to control our costs better than the average collision repair business. This purchasing power, coupled with our broad market coverage and intense focus on customer service, positions us to provide best-in-class quality, service and pricing to our clients, such as The Interinsurance Exchange of the Automobile Club."
Brad Bernstein, a partner at Oak Hill Capital Management spoke on behalf of the investor group noting that the collision repair industry is experiencing a renaissance -- a shift to sophisticated, corporate-owned services providing collision repair and claims support over broad geographic markets.
"We have observed Caliber's execution since early 1997 and have been impressed by the management team's blend of operating expertise in both the collision repair and insurance industries and with their ability to manage growth," said Bernstein.
"We are excited to have The Interinsurance Exchange of the Automobile Club join the investors supporting Caliber's growth. The Exchange's investment clearly validates Caliber's business model and performance as one that creates value for Caliber's customers and insurance clients."
The Interinsurance Exchange of the Automobile Club is a minority investor without any control, management or governance of Caliber's operations. The Exchange will not have a board seat, nor will it have access to any information other than that which is specifically related to the services Caliber Collision Centers provides to Interinsurance Exchange's customers.
Caliber Collision Centers commenced its operations concurrently with the initial equity investment by Keystone (formerly The Robert M. Bass Group), an affiliate of Oak Hill Capital Management and Global Asset Holdings Limited (formerly Zurich Centre Investments Limited), a predecessor-in-interest, of ZCGHL Services Limited, a member of the Zurich Financial Services Group.
Simultaneous with the close of that financing, Caliber acquired its first three collision repair centers in California. Caliber has acquired or developed 62 centers in California and Texas, and today has annual revenues exceeding $190 million.
The Interinsurance Exchange of the Automobile Club has provided automobile insurance to members of the Automobile Club of Southern California since 1912. Today the Exchange, which is an affiliate of the Auto Club, also provides homeowners and watercraft insurance to members of the Auto Club. The Exchange has an A+ rating from A.M. Best.
BNY Capital Partners L.P. is the private equity and mezzanine investment affiliate of the Bank of New York Co. Inc., one of the largest bank holding companies in the United States.
With more than $89 billion in total assets as of Sept. 30, 2001, the company provides a complete range of banking and other financial services to corporations and individuals worldwide through its basic businesses: Securities Servicing and Global Payment Services; Corporate Banking; BNY Asset Management and Private Client Services; Retail Banking; and Global Market Services.
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