Francisco Partners, a global investment firm specializing in partnering with technology businesses, announced it will acquire OEConnection LLC, a parts and repair software provider used across dealership and collision networks, from private equity firm Genstar Capital.
Financial terms were not disclosed, but in August, sources told Reuters the Ohio-based OEC could be valued up to $5 billion, including debt, or around 20x EBITDA. The company reportedly generates about $200 million of EBITDA on roughly $400 million of annual revenue.
OEC was founded in 2000 with participation from Ford, GM, Chrysler and Bell & Howell (now Snap-on Business Solutions), focused on software to facilitate the sale and distribution of original replacement parts among suppliers, dealers and repair shops. It has grown to power connections across the automotive aftersales network, serving OEMs, repair shops and aftermarket suppliers, offering solutions to create collaboration throughout the vehicle repair lifecycle.
Genstar Capital acquired OEC from Providence Equity in 2019; as part of that deal, Ford and GM retained minority stakes. Genstar, Ford and GM will remain minority investors after the sale to Francisco Partners, said Patrick Brown, CEO of OEC.
“Joining forces with Francisco Partners positions OEC to build on our strong momentum and further strengthen the value we deliver to our customers and partners,” said Brown in a statement. “Our transformative partnership with Genstar has enabled us to significantly expand our offerings in collision and mechanical repair, accelerate innovation, and grow our network globally.
“With Francisco Partners’ support, we look forward to continuing to deliver industry-leading solutions and improving repair outcomes for all stakeholders in the automotive aftersales ecosystem,” Brown added.
Brown was unavailable to comment further on what the deal means for OEC’s solutions for collision repair shops going forward, pending the close of the sale.
Petri Oksanen, partner at Francisco Partners, said OEC’s vision of “eliminating the pain in the vehicle repair process” resonates strongly with the firm.
“As the industry undergoes a generational and technological shift, OEC is uniquely positioned as a trusted partner that can deliver greater connectivity, efficiency and profitability across the ecosystem,” Oksanen said.
“We are thrilled to welcome OEC to the portfolio and excited to support Patrick and his strong team in this next chapter of growth with additional resources,” said Christine Wang, partner, and Mac Fountain, principal, at Francisco Partners.
Evercore is serving as exclusive financial advisor and Ropes and Gray LLP is serving as legal advisor to Genstar. Citi and TD Securities are serving as financial advisors and Paul Hastings LLP is serving as legal advisor to Francisco Partners.
