This month’s feature profiles nine of the major consolidators who are seeking to transform the collision repair industry by acquiring and building new shops to create regional and national chains of collision repair centers.
Over the past year, many of these companies have been mentioned in the Industry Update section of INSIGHT as they announced individual acquisitions or financing deals. Others have been somewhat quieter, building businesses, but keeping a low profile.
Beginning on page 11 of this issue, we provide detailed company profiles of each of the consolidators, including information on the number of facilities they currently operate, sales (where the company was willing to share figures) and their strategy for the upcoming year. All are aggressively pursuing acquisition opportunities and relationships with insurers or fleets in their market area.
The largest consolidator covered in this issue, in terms of number of company owned facilities, is ABRA Auto Body and Glass based in Minneapolis, MN with 22 repair facilities. In addition to their company owned facilities, ABRA has 35 franchises in 11 states and reports $30 million in sales volume from their company owned facilities and another $45 million from their franchisees.
ABRA is followed closely by M2 Collision Centers with 20 company owned facilities primarily in southern and northern California. Though they did not disclose sales figures, INSIGHT would anticipate that the sales volume in their stores would most likely surpass that of ABRA’s company owned operations. The largest network, including company owned and franchise affiliates is the CARSTAR group. CARSTAR recently began making acquisition for company owned stores. They currently have six facilities in Missouri and Nebraska. Caliber, with 105 licensees is the second largest network. Like CARSTAR they have gone on the acquisition route since the announcement of the equity infusion by Keystone Incorporated and Zurich Centre Investments. They currently have nine company owned facilities including the two PRO-CO facilities in Texas whose acquisition was announced in last month’s issue. (Editor’s Note: Keystone Incorporated is not the Keystone Automotive known in the collision repair industry for their line of aftermarket body parts and materials sales.)
Where’s Republic?
Unfortunately, the largest chain of company owned collision repair centers in the U.S., those owned by the automotive retail consolidator, Republic Industries, Inc., did not return phone calls requesting information for this article. As of press time for this article, Republic has acquired just over 200 dealer franchises across the country. Most are large, multi-franchise operations in metro markets. In talking with sources knowledgable with the company’s collision repair operations estimates of the number of collision repair facilities range from the mid-40s to roughly 65 shops. Many of these will be large, over $2 million facilities.
Taking a conservative $1.5 million average sales figure, Republic’s collision repair sales would total somewhere in the neighborhood of $67 million to $97 million per year. Chances are this number will be an understatement, especially considering that the pace of Republic’s acquisitions could add five or ten franchises by the time you read this article.
Sources indicate that the company is currently developing a strategic plan for their collision repair operations to improve poor performers and begin the process of developing insurance relations on a national basis.
On page nine of this issue we include results of this month’s TrendLine Survey of shop operator attitudes towards industry consolidation. The survey, asking the same questions we asked for the May, 1997 issue of INSIGHT, shows rather large swings in repairers’ opinions on how consolidation will affect their business.
When asked in May how shops anticipate consolidation will affect their volume of business, 54 percent stated they believed it would increase due to consolidation. In this survey, that number declines to 33.2 percent. The number of shops that feel consolidation will have no change on their business increased to 50 percent from 35 percent in the earlier survey. Repairers evidently see no personal benefit from consolidation, yet do not feel it will hurt their own business.
Also, the number of collision repair facilities that felt consolidation would swing negotiation power in their favor also declined to 29.4 percent from 44 percent in May- evidence of a slightly gloomy outlook from operators.
In future issues of INSIGHT, we will continue our coverage of the consolidation with additional reports on consolidators and the effects of consolidation upon the industry as a whole.
Reprinted from the December 1997 Issue of Collision Repair Industry INSIGHT.
© 1997 Collision Repair Industry INSIGHT. All Rights Reserved
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