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Wednesday, 27 January 2021 17:42

2020 Collision Year in Review by Focus Advisors

Index

...more regional and local MSOs seeking to grow.

 

Platform acquisition values have held up as private equity interest has remained strong, and as the consolidators and super-regional MSOs expand into new markets.

 

Mid-size MSOs with three to eight shops are maintaining their reasonable values, as the super-regionals continue to bulk up in their existing markets and expand into new ones.

 

Overall, despite the ravages of COVID, the number and value of transactions has been remarkable.

 

Insurer Changes

 

As the consolidators enhance their offerings to insurers, DRP networks are becoming more restrictive. Cycle times and average cost of repairs are putting insurers under enormous pressure to reduce costs. So insurers are channeling more assignments into the largest operators and requiring them to take on more administrative responsibilities.

 

State Farm continues pruning its Select Service program. Even the strongest regional MSOs are being disappointed by State Farm’s changes. There have been multiple market dominant platforms, from $15 million to $50 million, who have found themselves losing appointments after decades of superior performance.

 

GEICO is working out the kinks of its 2.0 program, opening new opportunities for shops to reengage after termination from the ARX program in the past.

 

Conclusion

 

From the depths of despair in April to the optimism of the late summer rebound to the chilly waters of December, it was a roller coaster ride---a ride no one ever wants to set foot on again.

 

No one wants to read or hear the word “unprecedented” ever again either. So we will substitute a host of alternatives---anomalous, bizarre, frightful and remarkable---to describe the year that was.

 

Source: Focus Advisors

 

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