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Merging two family-owned MSOs, Legacy Autobody builds foundation for future growth

Tuesday, June 25, 2019 - 06:00
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There is strength in numbers, which is why many shop owners have considered either expanding their business to become an MSO, or looked at partnering with a franchise brands or a consolidator. Pennsylvania’s Legacy Autobody Group is the result of two family-owned MSOs teaming up under the CARSTAR brand, and creating a strong, competitive business.

Both Scott’s Collision Centers and Duncan Autobody were well-known in Eastern Pennsylvania. The shops had a lot in common – both companies were launched in the early 1970s, both had two locations, and both were family-owned, with second-generation leaders in place in the 2000s.

At a Glance:
Legacy Autobody
Easton, Pa.
No. of locations
No. of employees
Markets served
Spies Hecker
Paint supplier
$18 million

According to Matt Dewalt, Legacy’s co-owner and former president of Scott’s, the two companies had been friendly competitors for years. In 2017, Dewalt and Duncan’s owners (Mike and Eric Horvath) decided that they would be stronger if they merged.

“We’d have more buying power, and we’d be able to leverage better vendor discounts,” Dewalt says. “We also liked the concept of working together – they know things that I don’t know, and there are things I know that I could teach them. It’s nice to have somebody onboard that has your back. And having four shops would give us more marketing power and help us compete against the bigger shops.”

Local competition includes Gerber, Caliber Collision, and two large dealership groups with autobody operations. Dewalt and the Horvaths decided they would need some stronger DRP relationships to stay competitive (neither group had many DRP agreements in place), and opted to partner with CARSTAR in order to take advantage of the company’s national insurer agreements.

Managing the merger

The employees at the existing locations welcomed the merger. “We explained why we were doing this, and they were all excited,” Dewalt says. “We explained that healthcare costs were rising, competition was increasing, and we didn’t want to keep asking them to pay more or do more. We could save money and grow the company.”

From left to right: Eric Horvath, Matt Dewalt, Mike Horvath

Dewalt says the biggest challenge of merging the companies together was adjusting to the co-ownership arrangement. “You’re working with people every day that you weren’t working with before,” Dewalt says. “Originally we talked to a lot of consultants to do business evaluations on how to split the ownership, but ultimately we just decided to come to a number on our own.”

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