...vehicle miles traveled and auto claims haven’t deterred investors’ interest in acquiring shops.
“I think there was bit of hesitation, as it relates to figuring out the deals, at the start of COVID,” Sahney said. “I think we’ve [since] shifted now to, ‘OK, this is the new reality that we’re going to live in for a while. So how do we adapt our deal-thinking to the reality we’re in.’
"And I think folks have become very creative in finding ways to look at where businesses were pre-COVID, what happened during COVID and what do you believe about the future," Sahney continued." There’s all sorts of hypotheses about where we will land. I think we will land in a new normal that may look different than where this industry was before COVID, but it’s going to look something closer to that than where we’ve been the last six months.”
Seiffer agreed COVID is likely not a long-term negative in this industry.
“Even if it lingers, people’s behaviors have adapted,” he said, acknowledging resumption of traffic has rebounded to varying degrees around the country. “If you’re looking for a platform, you’re presumably looking to build something much bigger over time. So a short-term blip shouldn’t really change your view on the opportunity.”
He said there will no doubt be permanent changes that will negatively affect other parts of the economy, but there may actually be some upsides to the pandemic in the medium-term for collision repairers.
“There will be some subset of people who will be slow to return to mass transit and other forms of transportation, and I don’t think working from home is going to be an option forever,” Seiffer said.
How does private equity view the potential longer-term impact of advanced driver assistance systems (ADAS) and autonomous vehicles? Sahney noted it takes a long time for...