The “Big 4” MSOs combined have fewer than 1,000 shops. That leaves 30,000-plus shops that might want to “grow smart or exit smart” in terms of adding locations or selling their business.
It was those shops that were the focus of one of the presentations at the “Collision Repairer Executive Symposium,” at this year’s NACE. The day-long conference, previously called the “MSO Symposium” and open only to MSOs, was opened up this year to include single-location collision repair representatives with interest in becoming an MSO – or potentially selling their business to one.
More than 300 people attended the event, which included four sessions. One focused on the impact of changing vehicle design. Another included a panel of MSOs discussing “maximizing capacity utilization” – ways to get the most out of your shop facilities. But wrapping up the day was a session led by industry consultant Marcy Tieger of Symphony Advisors, whose clients have been involved in both sides of shop buy-sell agreements. Tieger asked two other acquisition veterans to step into the roles of buyer or seller in order to offer advice to symposium attendees about what to think about during the acquisition process.
|Will Johnston and John Walcher|
Playing the role as a “buyer” was Will Johnston, vice president of acquisitions for the Texas-based Service King collision repair chain. Johnston helped Tennessee-based Autobody America grow from five locations to 20 over six years before it was acquired by (and he joined) Service King in 2012.
Johnston said that although the largest chains making acquisitions get the most attention in the industry, sellers should not overlook that many smaller MSOs are interested in acquiring shops. It can be personally (as well as financially) rewarding, he said, for someone with an operation with good processes in place to replicate and grow that. There are advantages to that increased scale in terms of relationships with vendors and sources of referrals. And employees, he said, get a sense of excitement and pride being part of something that’s growing.
But Johnston said there can be a “defensive” element to acquisitions for buyers as well, acknowledging that a number of Autobody America shop acquisitions fell into that category.