U.S. Fidelity Holding Corp. Completes Acquisition of Houston, Texas-Based Mirror Finishes
U.S. Fidelity Holding Corp. affiliate Unistar Financial Services LLC has finalized the acquisition of its most widely used Houston, Texas-based auto collision repair center, Mirror Finishes and Collision of Texas, LLC, to maximize service to claimants and to minimize insurance claims expense.
U.S. Fidelity’s Chairman, Marc A. Sparks, states, "The acquisition of Mirror Finishes provides us with a substantial base for expansion of auto body collision repair centers throughout the state of Texas. We will own a preferred collision repair center in every major city in which we sell auto insurance. We anticipate that this acquisition will save our shareholders 20% to 25% in auto insurance collision claims repair costs, and result in substantially reducing an already excellent loss ratio by another 5% to 8%. The founder of Mirror Finishes, Mr. Dan Deschamps, will remain as president."
Headquartered in Dallas, Texas, U.S. Fidelity Holding Corp. is an insurance holding corporation specializing in auto insurance, premium financing, insurance claims management, and collision repair centers. U.S. Fidelity Holding Corp.’s wholly-owned subsidiaries include: Great Southern General Agency and First Choice Underwriters - managing general agencies, Eagle Premium Finance Company, and Eagle Claims Corp. - an auto insurance claims company, and a multitude of retail auto insurance agencies.
The company operates in Texas, Florida and California. According to Sparks, they are looking for additional repairer acquisitions in these markets.
BASF Automotive Refinish Names New Vice-President and Director of National Sales
BASF announced January 27 that Albert W. Winterman has been appointed group vice president of BASF Corporation’s Automotive Refinish business. Also, Richard Leenstra has been named director, national sales, Automotive Refinish. Both appointments took effect immediately.
Before assuming his new position, Winterman was director, automotive business, for BASF’s Plastic Materials and Urethanes business groups. Prior to his last assignment, Winterman held several positions in the Polymers Division since joining BASF in 1987. Winterman has replaced Donald S. Campbell, who left the company.
Leenstra has joined BASF after working 11 years at Sherwin Williams, most recently as vice president, sales and marketing, Leenstra replaces Santos Campos, who is retiring from the company.
Keystone to Acquire Republic Automotive Parts-Also Acquires Coast to Coast Hubcap and Wheels
Keystone Automotive Industries, Inc. and Republic Automotive Parts, Inc. announced February 18 that they have signed a definitive merger agreement under which Keystone will acquire Republic.
Under the terms of the agreement Keystone will issue 0.8 of a share of its common stock in exchange for each share of Republic Automotive’s common stock. This will involve the issuance of a total of approximately 2.9 million shares of Keystone common stock. Currently, Keystone has approximately 14.6 million shares of common stock outstanding.
The transaction, which has been approved unanimously by the board of directors of each company, is intended to qualify as a tax-free reorganization. The merger agreement is subject to certain regulatory approvals as well as approval by the shareholders of each company at special shareholders meetings expected to be held within the next 90 days. Closing of the merger is expected during the second quarter of 1998.
For the nine months ended September 30, 1997, Republic reported revenues of $146.2 million and net income of $3.2 million.
Charles J. Hogarty and Keith M. Thompson, Chief Executive Officers of Keystone and Republic Automotive Parts respectively, jointly commented, "We are extremely pleased to announce this merger agreement. Through it we will take an important strategic step toward forming a nationwide system for distributing automotive collision repair parts. Republic’s focus on the Southeast and Southwest fits well geographically with Keystone’s current system. The merger will extend the Keystone network into 16 additional cities, and we will have the opportunity to broaden the product line that Republic has previously marketed in those locations. Equally important, we expect to be able to build stronger working relationships with suppliers in consideration of our enhanced competitive position."
Through its Fenders & More division, Republic Automotive operates 23 collision repair parts distribution centers primarily located in the southeastern United States and Texas. Republic also operates 11 traditional hard parts distribution centers that, through a chain of company-owned and independent parts jobbers, service mechanical repair shops.
Keystone Automotive Industries, Inc. distributes its products in the United States primarily to collision repair shops through its 86 service centers, of which 13 serve as regional hubs.
On February 11, Keystone announced that it had acquired Coast to Coast Hubcaps and Wheels of Tampa, FL.
Coast to Coast supplies used and reconditioned original equipment hubcaps and wheels to customers through its wholesale division and to the greater Tampa area through its route salesman and its two retail stores. Coast to Coast has historical annual revenues of $4.8 million.
Terms of the transaction were not disclosed.
Charles J. Hogarty, president and chief executive officer, said, "The acquisition of Coast to Coast Hubcaps and Wheels is an important strategic acquisition in the development of our wheel program for several reasons."
As its name implies, Coast to Coast sells wheels and hubcaps nationwide utilizing a phone bank in Tampa. The company sells products to a broader customer base than Keystone’s core customer which is the collision repair industry.
CCC and Kirmac Announce Collision Repair Enterprise Solution Partnership
CCC Information Services and Kirmac Information Technologies announced February 5 a partnership to bring Kirmac’s multiple facility collision repair shop management system to the North American market.
The product, to be called Pathways Enterprise Solution, is the first entrant in the software arena for managing large scale collision repair enterprises.
Ian McIntosh, president of Kirmac, has agreed to join CCC in this effort and will focus on the successful delivery of Enterprise to the auto repair marketplace. McIntosh has successfully operated collision repair facilities for over 20 years and currently operates 12 stores in Vancouver, Canada.
According to McIntosh, "The Pathways Enterprise Solution manages assets, human resources, facilities and information across the entire enterprise. The end result is better consumer service, higher revenues and profit, and importantly, more free time for owners and managers."
Enterprise has been in design and development for three years. Utilizing workflow design and the most modern development tools, Enterprise enables user access to data and applications through Intranet, Extranet and the Internet using standard web browers.
According to Tim Wilder, general manager of Kirmac, "Our technology allows very rapid system development and low cost maintenance. In addition, because the user can access information with nothing more than Windows95 on a laptop, we have enabled our vision of the manager on the beach."
CCC has licensed the Kirmac technology for the North American marketplace and will provide continuing product development funds necessary to integrate the product with other CCC offerings.
Binks Sames to Pursue Sale of the Company
Binks Sames Corporation announced February 13 that it has instructed its investment banker, William Blair & Company, LLC, to pursue a sale of the Company. The Board of Directors believes that pursuing a sale is the Company’s best available alternative to maximize the value of the business.
The Company also announced John J. Schornack, 67, resigned and retired from his position as a Director and Chairman of the Board of Directors of the Company.
Dr. Donald G. Meyer, 63, a director of the Company since 1996 and previously from 1990 to 1995, has been elected Chairman of the Board to succeed Mr. Schornack.
Doran J. Unschuld, 74, the Company’s President and Chief Executive Officer since 1996 and an employee of the Company since 1952, has announced that he will retire as President and Chief Executive Officer at the Company’s annual meeting in April 1998.
The Company also announced that it has completed an interim financing arrangement and is continuing cooperative and productive negotiations with its lenders on a multiyear credit facility.
The Company announced continuing improvements in its Longmont, CO production facility. Production levels for the month of January, 1998 were 15% higher than production levels during its fourth quarter ended November 30, 1997. Production shortfalls began in the second quarter of 1997, coinciding with production being shifted to Longmont from Franklin Park, IL which severely impacted sales and earnings.
As a result of production improvements at Longmont, sales order backlogs for standard products have declined 31% from a peak at August 1, 1997 - a trend which the Company expects to continue. Compared to the same period a year ago, year-to-date standard product orders through January 1998 were up 3% reversing the 7.5% decline experienced during the fourth quarter ended November 30, 1997.
Collision Centers International Sues Collision King
Collision Centers International, Inc. and five former officers and directors of Collision King, Inc. have sued Collision King, Inc. in federal court in Tulsa, OK.
Collision Centers International, Inc. and the other plaintiffs have alleged that Collision King, Inc. committed securities fraud in connection with the October 1996 transaction in which Collision King, Inc. acquired a majority interest in Collision Centers International, Inc.
Collision Centers International, Inc. and the other plaintiffs have also asked the Court to enter a preliminary injunction prohibiting Collision King, Inc. from taking the assets and business plan of Collision Centers International, Inc. The court has entered a temporary order preserving the status quo until Collision King, Inc. retains counsel to represent it at the hearing on the Plaintiffs’ application for injunctive relief.
On January 7, Laura "Cindy" Morrison resigned as President and Chief Executive Officer of Collision King, Inc. On the same day J.R. Brazeal resigned as Chief Financial Officer and Secretary-Treasurer and William Eveland, William Bailey and Robert H. Jones, Jr. resigned as directors. Morrison, Brazeal, Eveland, Bailey and Jones have joined Collision Centers International, Inc. in the lawsuit against Collision King, Inc. It is anticipated that other shareholders of Collision King, Inc. will join the lawsuit.
The lawsuit against Collision King, Inc. is based in large part on issues and events identified in a letter that Morrison sent to the board of directors of Collision King, Inc. in December 1997. When the board failed to provide a response that Morrison and the others considered to be satisfactory, Morrison and the other four officers and directors resigned.
FinishMaster Agrees to Acquire Florida Distributor LDI AutoPaints
The board of directors of FinishMaster, Inc. announced February 20 the long expected acquisition of LDI AutoPaints, Inc., a distributor of automotive paints and related products in Florida currently owned by Lacy Distribution, Inc. LDI AutoPaints comprises the Steego jobber operations that Lacy Distribution purchased prior to taking the majority interest in FinishMaster.
FinishMaster said terms of the agreement call for the acquisition of LDI AutoPaints from its parent, Lacy Distribution, Inc., in consideration for the issuance of approximately 1.5 million additional shares of the common stock of FinishMaster. The all-stock transaction would increase Lacy Distribution, Inc.’s ownership stake in FinishMaster from 67 percent to approximately 75 percent of the company’s total shares issued and outstanding.
"This transaction is a good strategic fit for FinishMaster and is in the best interest of our shareholders," said Tom Young, president and chief operating officer of FinishMaster. "LDI AutoPaints will be a strong complement to our Thompson subsidiary and their Florida presence. This is a very good fit to our long-term strategy and will enhance FinishMaster’s growth opportunities in the Southeastern region."
A special board committee of independent directors evaluated and recommended the agreement to acquire LDI AutoPaints to the FinishMaster board of directors. The special committee retained McDonald & Company Securities, Inc. to render a fairness opinion regarding the transaction contemplated by the agreement from a financial point of view. The agreement was unanimously approved by the FinishMaster board. The agreement is subject to shareholder approval and it will be considered at the Company’s 1998 annual meeting of shareholders.
The board of directors of FinishMaster also announced it has recommended to the shareholders that the number of the company’s authorized shares of common stock be increased by 15 million shares, bringing the company’s total authorization to 25 million shares. The proposed increase will also be submitted for shareholder approval at the Company’s 1998 annual meeting of shareholders.
"The board of directors strongly believes in the growth prospects of FinishMaster, and though we have no immediate plans to issue these new shares, their availability would ensure we have the necessary resources for continued expansion," said Andre Lacy, chairman of the board of FinishMaster.
FinishMaster, Inc. and its wholly owned subsidiary Thompson PBE have a combined 144 distribution outlets in 23 states. The acquisition of LDI AutoPaints would add 16 distribution outlets to FinishMaster.
United Recyclers Group Forms a Strategic Alliance with Mitchell International
The United Recyclers Group, LLC (URG) announced February 6 that they have formed a strategic alliance with Mitchell International.
Through its recently created joint venture with Actual Systems of America (ASA), URG will provide its 360+ partners with the Mitchell collision estimating guides, electronically, on URG’s new Recyclers Information Management System (RIMS).
Marc Brungger, Mitchell’s Senior Director of Publications, said, "This alliance provides new tools to this progressive group of auto recyclers and shows our commitment to alliances with the automotive recycling community. This electronic information will allow the URG partners to communicate more effectively with their customers, using Mitchell collision estimating guides as a common language."
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Reprinted from the March 1998 Issue of Collision Repair Industry INSIGHT.
© 1998 Collision Repair Industry INSIGHT. All Rights Reserved
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