Tuesday, 18 December 2012 23:11

2012 Adding Up to a Record Year for MSO’s Shop Consolidation, All Major MSO’s Add Shops

The pace of acquisition of both smaller MSOs by larger ones and independent shops has substantially increased during 2012. The rate of acquisitions has been running at more than two shops per week for 2012.

CARSTAR Auto Body Repair Experts is North America’s largest Multi-Shop Operator (MSO) Network of independently owned collision repair facilities with more than 400 locations in 31 states and 10 Canadian provinces. CARSTAR recently expanded its business development team to accelerate the expansion of the MSO network into two of the fastest growing regions—the Western U.S. and the Southeast. Shops that join CARSTAR pay a one-time joining fee ranging from $5,000 to $15,000, and then pay a percentage of sales each month, according to former CARSTAR CEO Dan Bailey. Typical monthly royalty fees are .75 percent to 2 percent of sales.

Fix Auto USA added a franchise model to network membership in January 2011, and currently has 50 franchise locations operating in four states: California, Colorado, Oregon and Washington. Fix Auto’s increased its presence in the Seattle market to six locations, while doubling locations in the Pacific Northwest from six to 12 stores in the last year.

Fix Auto USA CEO Erick Bickett said, “Extinction [in the collision business] has already begun with the shift of market share at a time when there is a declining demand for the repair services that we provide. If you aren’t considering or making changes, you are being left behind. The big get bigger and the smaller will disappear, unless they are in a niche market. Independent repair operators can survive if they evolve their business and participate in a collision repair solution that is less expensive to do business with.”

Boyd Group
Last week Boyd Group has announced the opening of their 180th location. The 15,000 square foot facility in Orlando, Florida, previously Colonial Auto Body, will now operate under the Gerber Collision & Glass trade name, the Boyd Group’s largest U.S. brand.

The Boyd Group now owns and operates 37 repair centers in Florida, a state in which the company didn’t even do business in until a year ago. President and COO of the Boyd Group’s U.S. operations Tim O’Day said, “We strongly believe that Florida is an attractive market for the Boyd Group.

In June this year Boyd Group announced that it would acquire the assets of Pearl Auto Body, which owns six collision repair centers in the Denver area.

At the end of last year, the Boyd Group owned 136 locations in the United States. In the past 12 months, the company has added 44 stores including the two recent acquisitions of Autocrafters and The Recovery Room which accounted for 23 of this year’s new locations. And Boyd is not the only consolidator growing rapidly this year.

Caliber Collision
Caliber is a multi-shop operation with 112 locations—including 49 in California, 48 in Texas, eight in Arizona, and two in Nevada. The company also completed its third acquisition in the greater Oklahoma City market. 2011 revenues were $365 million, a 15.5-percent growth over 2010, said Steven Grimshaw, president and CEO.

Caliber Collision began 2012 with 94 locations and ended the year with 112. Most of their purchases were one and two-shop operations with their biggest purchase being the five locations of 101 Collision in California, in February.

Mark Sanders, Chief Operating Officer for Caliber, recently said, “We will continue to increase our market penetration in this and other southwestern U.S. markets in the months to come.”

ABRA Auto Body & Glass
ABRA Auto Body & Glass has also been on an acquisitions streak. ABRA announced the acquisition of all five Collision Solutions locations in Indianapolis, IN. ABRA’s five newly acquired repair centers are located in Kensington Commons, Robbins Park, Beech Grove, Shelton Heights, and Westfield. The deal increases the number of ABRA repair centers nationwide to 132 in 14 states. ABRA now operates 128 stores in 14 states. At the end of last year, ABRA had just 112 locations in 12 states.

Service King
Richardson, TX-based Service King was itself acquired by a management team backed by the investment firm, Carlyle group. Service King grew by 16 shops this year to a total of 63 locations. With 49 stores all within the state of Texas, Service King expanded to the state of Arizona with its acquisition of Auto Body World and also became the latest industry consolidator to attract Wall Street’s attention when the Carlyle Group stepped in to acquire a majority ownership in the chain.

Adding in a few additional acquisitions this year by the smaller consolidators like Cooks Collision (which added 8) and Collision Revision (2), the year 2012 has seen 104 repair facilities acquired by these six companies alone. That is more shops than the total number of locations Caliber Collision owned just 12 months ago.