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Wednesday, 03 February 2021 21:42

Forecast: Expect More Private Equity Coming Into the Industry

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Neal Sahney and Jonathan Seiffer, representatives of two private equity firms, said investors like the stability and scale opportunities they see in collision repair. Neal Sahney and Jonathan Seiffer, representatives of two private equity firms, said investors like the stability and scale opportunities they see in collision repair.

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...new technologies to be in place in a large percentage of the vehicle population on the roads.

 

“The feeling on it is we’re still decades away from that truly hammering away at the industry,” Sahney said.

 

In addition, he said, MSOs are going to be in a much better position than a single-shop operation to make the investments in being able to service those technologies.

 

Seiffer agreed, saying he sees ADAS as likely to have a bigger impact on personal injury claims than collision claims.

 

“So we pay attention to it, but people tend to overestimate how quickly the world will change,” Seiffer said. “We pay attention to it, but view it a little bit as noise, and try to focus on the bigger picture.

 

"There are going to be a lot of cars in the U.S. for a long time, and those cars are going to get into accidents because of weather, congestion and distraction. Cell phones have been a huge benefit for the industry.”

 

Even if collision repair work declines over time, he said, well-run MSOs will find other ways to use a network of bays with skilled workers.

 

“If you have talented folks, and a distribution network with points of access, there will be new business opportunities that arise if others start to go down,” Seiffer said.

 

Autonomous vehicles may result in a larger population of cars rather than smaller, and those vehicles will have service and repair needs beyond collision repair.

 

“The infrastructure that’s built may move a bit over time,” Seiffer said. “You may not need city center locations, or Main Street locations, but I think [shops] will still have tremendous value to the automotive transportation infrastructure.”

 

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