In a recent development, Audax Private Equity’s strategic investment in Dobbs Tire and Auto Centers has sparked conversations about the ever-evolving dynamics in the mid-size automotive aftermarket business. Yogesh P Punjabi, Managing Director at middle market investment bank Capstone Partners, shares valuable insights into the key trends shaping investment activity in this sector.
As the automotive aftermarket landscape undergoes a significant shift, Punjabi highlights a noticeable trend where investors are increasingly favoring non-discretionary services, such as tire retail, general repair, collision, and glass. This preference has resulted in a surge of new platforms being established in highly fragmented subsectors, contrasting the decline in enthusiast-oriented businesses within the aftermarket.
Punjabi emphasizes the recession resistance of non-discretionary parts and services in the aftermarket, attributing it to the industry’s resilience during challenging economic times. The conversation further delves into the factors that make family-owned-and-operated service providers like Dobbs attractive to financial buyers, including industry tailwinds, the shift from DIY (do-it-yourself) to DIFM (do-it-for-me), and proven consolidation success by financial investors.
In the interview, Punjabi shares insights from both recent live engagements—including the Dobbs transaction—and Capstone’s most recent Automotive Aftermarket M&A Update. The interview explores the strategies employed by financial buyers, such as Kian Capital, O2 Investment Partners, and The Sterling Group, in deploying capital and establishing new platforms. Punjabi sheds light on the commonalities among these strategies, including strong regional platforms, proven management organizations, and a focus on potential pipeline acquisitions.
Looking ahead, Punjabi envisions financial buyers intensifying their focus on services sectors, particularly tire retail, general repair, and collision repair. Additionally, he anticipates increased interest in aftermarket wholesale distribution and technology plays across the services spectrum.
The discussion extends to the specific diligence criteria and priorities financial buyers emphasize when evaluating potential targets in the automotive aftermarket. Factors like a strong management team, financial growth, brand reputation, and revenue growth driven by demand play pivotal roles in their decision-making process.
As private equity interest in the sector remains robust into 2024, Punjabi offers valuable advice to middle-market businesses seeking acquisitions. Preparation, transparency in operational and financial data, and strategic planning are highlighted as critical elements, along with the importance of selecting a seasoned M&A advisor early in the process.
This Automotive Industries interview with Yogesh provides a comprehensive overview of the current state of the automotive aftermarket, offering valuable insights for businesses, investors, and industry enthusiasts navigating this transformative landscape.
Automotive Industries: Yogesh, given the recent Audax Private Equity’s growth investment in Dobbs Tire and Auto Centers, can you share insights on the key trends that Capstone Partners has identified driving investment activity in the mid-size automotive aftermarket businesses?
Punjabi: Investors are strongly favoring the non-discretionary side of the automotive aftermarket, especially across services (tire retail, general repair, collision, glass, etc.). There have been proven PE-backed platforms in this space for many years, but there is an increased focus on establishing new platforms in highly fragmented subsectors.
This shift has largely occurred at the expense of aftermarket enthusiast-oriented businesses, similar to the dynamic across other enthusiast sectors.
The aftermarket is recession-resistant – especially the non-discretionary parts and services sub-segments of the aftermarket.
Automotive Industries: With private equity platform investment activity having faced challenges in 2023, what factors have made the automotive aftermarket sector, especially family-owned-and-operated service providers like Dobbs, attractive to financial buyers?
Punjabi: There are several factors at work here:
- Compelling underlying industry tailwinds in the aftermarket. For example, average vehicle age is older, miles driven are up, and the number of vehicles on the road is higher. These sector fundamentals lay a strong foundation for continued growth.
- An ongoing shift from DIY (do-it-yourself) to DIFM (do-it-for-me) in the parts and services space.
- Highly fragmented and large addressable markets across service subsectors.
- Proven consolidation success by financial investors (i.e., Mavis, Sun Auto, etc.) with significant runway remaining for further consolidation.
- An attractive financial profile and potential investment returns through greenfield, brownfield, and M&A.
- A scarcity of high-quality, independently owned platforms of scale with regional market density and longstanding brand/reputation.
- The recession resiliency of the non-discretionary automotive aftermarket.
Automotive Industries: Capstone Partners mentioned that financial buyers accounted for nearly half of the annual sector deal volume through Q3 2023. Could you elaborate on the strategies employed by these financial buyers, such as Kian Capital, O2 Investment Partners, and The Sterling Group, in deploying capital and establishing new platforms in the automotive aftermarket?
Punjabi: These are privately held investments, so we cannot elaborate much given the confidential nature of discussions. However, at a high level, they all have in common a strong regional or multi-regional platform investment with attractive scale, proven management organization (either centralized or de-centralized), a large potential pipeline of add-on acquisitions, and well-capitalized institutional ownership.
Further, most of these businesses are comprised of independent brands, while Kian’s platform especially is comprised of a large franchisee in the Meineke system.
Automotive Industries: In light of the recent establishment of platforms like PARC Auto by Kian Capital, Straightaway Tire & Auto by O2 Investment Partners, and Premier Tire & Service by The Sterling Group, what do you see as the driving forces behind the creation of these new platforms, and how do they contribute to the overall M&A landscape in the automotive aftermarket?
Punjabi: The driving forces behind these platforms are similar to those mentioned above, which apply broadly to the automotive aftermarket non-discretionary services sectors.
Automotive Industries: Given the projections for robust activity in the sector throughout 2024, how does Capstone Partners foresee the role of financial buyers evolving, and what specific opportunities do you anticipate for mid-size businesses in the automotive aftermarket space?
Punjabi: We believe that financial buyers will become even more focused on the services sectors of the aftermarket, namely tire retail, general repair, and collision repair. We also believe that there will be increased interest in the aftermarket wholesale distribution segment, along with technology plays across the services spectrum (i.e., diagnostics, ADAS calibration, fleet maintenance, etc.).
Automotive Industries: Jason Ellis from Audax PE highlighted Dobbs’ attractiveness due to the quality of its operations, strong customer loyalty, and employees. Can you shed light on how these factors played a role in identifying Dobbs as an attractive platform and how they align with Capstone Partners’ overall investment thesis in the auto services sector?
Punjabi: Audax’s investment thesis revolves around most if not all of the factors I mentioned earlier.
We ran a highly competitive transaction process for Dobbs Tire in 2023, and given Audax’s well-defined investment thesis in the space, coupled with their proven success and experience across the various aftermarket sectors, they ended up partnering with the Dobbs family to accelerate the growth of the business.
Automotive Industries: As private equity buyer activity remains robust in 2024, could you elaborate on the specific diligence criteria and priorities that these buyers are focusing on when evaluating potential targets in the automotive aftermarket?
Punjabi: The criteria investors are currently prioritizing include:
- A strong management team supported by growth-minded employees.
- A proven history of financial growth and profitability.
- Attractive operating metrics compared to industry players.
- Strong brand reputation (regionally or broadly) with a loyal/repeat customer base.
- Revenue growth driven by sales volume (demand) in addition to price increases.
- A long runway of potential add-on opportunities.
Automotive Industries: In the context of inflationary pressures easing and acquirers prioritizing companies with demonstrated unit growth and healthy demand, what advice would Capstone Partners offer to middle-market businesses in the automotive aftermarket seeking to position themselves attractively for potential acquisitions by private equity buyers?
Punjabi: My strongest piece of advice is to start preparing your business early–ensure that operational data and financial books are in order (either reviewed or audited financials), legal documents like contracts, incorporation documents, etc. are assembled, you have filled out your management team to the extent possible, and that you have a solid plan for key employee retention post-transaction. In addition, have a view on growth opportunities—under current ownership as well as potential for the next owner or investor—start discussions (if possible) with potential add-on business owners, continue to focus on growing the business, and don’t hesitate to proceed with major capex projects. In essence, do what is best to position the business for current and sustained growth.
Finally, select a strong M&A advisor with proven experience in your sector—the earlier this is done, the better—to ensure that your business is prepared for an M&A event and can withstand the meaningful diligence process of a financial investor. The groundwork for a successful transaction is often laid years in advance, and having an expert on side to guide you through the process can make a world of difference.
Đừng bỏ lỡ PKWIN – lựa chọn số 1 cho mọi tín đồ cá cược trực tuyến! Từ bảo mật dữ liệu tuyệt đối, giao diện thân thiện đến trả thưởng nhanh như chớp, mọi thứ đều được tối ưu để mang lại trải nghiệm hoàn hảo. Tham gia ngay hôm nay và rinh ngay 188K về tài khoản chỉ với vài bước đăng ký đơn giản.
Trải nghiệm thế giới cá cược hàng đầu tại PKWIN – nơi hội tụ đam mê và cơ hội chiến thắng. Với nền tảng bảo mật tiên tiến, tốc độ xử lý cực nhanh và trả thưởng siêu tốc, PKWIN mang đến trải nghiệm mượt mà chưa từng có.
555win không đơn thuần là một nhà cái – đó là điểm hẹn của những người yêu thích sự mới mẻ và đột phá trong cá cược trực tuyến. Với tầm nhìn chiến lược cùng công nghệ hiện đại, nền tảng này mang đến trải nghiệm đẳng cấp, nơi mỗi lượt đặt cược đều chứa đựng cơ hội thay đổi cuộc chơi. Đây chính là xu hướng giải trí thông minh mà người chơi không thể bỏ qua trong năm 2025.
Ra đời năm 2020, 99OK đã ghi dấu ấn mạnh mẽ trong cộng đồng game thủ Việt Nam và quốc tế. Sở hữu kho trò chơi phong phú, giao diện tối ưu cùng công nghệ bảo mật hiện đại, nền tảng mang đến trải nghiệm chơi mượt mà và an toàn tuyệt đối. Sau hơn 5 năm phát triển, 99OK không chỉ là nơi giải trí mà còn là cơ hội để người chơi nâng cao kỹ năng, kiếm thêm thu nhập và tận hưởng cảm giác chiến thắng đỉnh cao trong thế giới game trực tuyến.
Definitely imagine that which you stated. Your favorite reason seemed to be at the internet the simplest thing to remember of. I say to you, I definitely get annoyed whilst folks consider worries that they just do not understand about. You controlled to hit the nail upon the top as smartly as outlined out the entire thing with no need side-effects , folks can take a signal. Will likely be back to get more. Thanks
This is the right blog for anyone who wants to find out about this topic. You realize so much its almost hard to argue with you (not that I actually would want…HaHa). You definitely put a new spin on a topic thats been written about for years. Great stuff, just great!
Great line up. We will be linking to this great article on our site. Keep up the good writing.
Enjoyed examining this, very good stuff, appreciate it.
You made some clear points there. I did a search on the topic and found most persons will go along with with your blog.
Great wordpress blog here.. It’s hard to find quality writing like yours these days. I really appreciate people like you! take care
I am forever thought about this, appreciate it for putting up.
Thanks – Enjoyed this post, is there any way I can get an update sent in an email every time you make a new update?
I got what you intend, thankyou for putting up.Woh I am happy to find this website through google.
Your style is so unique compared to many other people. Thank you for publishing when you have the opportunity,Guess I will just make this bookmarked.2
There may be noticeably a bundle to know about this. I assume you made sure nice factors in options also.
I think other web-site proprietors should take this website as an model, very clean and magnificent user friendly style and design, as well as the content. You’re an expert in this topic!
I really like your blog.. very nice colors & theme. Did you design this website yourself or did you hire someone to do it for you? Plz reply as I’m looking to create my own blog and would like to know where u got this from. appreciate it
This actually answered my problem, thanks!
I am often to running a blog and i actually recognize your content. The article has actually peaks my interest. I’m going to bookmark your site and keep checking for brand spanking new information.
Great post. I am facing a couple of these problems.
I in addition to my guys have been going through the best key points from the blog and so before long came up with a terrible suspicion I had not thanked the web blog owner for those secrets. My women are actually for that reason joyful to read them and have now pretty much been making the most of them. Appreciation for turning out to be so accommodating as well as for choosing this sort of fine things most people are really wanting to be aware of. Our sincere regret for not saying thanks to you earlier.
Great beat ! I would like to apprentice at the same time as you amend your website, how can i subscribe for a blog website? The account aided me a applicable deal. I were a little bit acquainted of this your broadcast provided shiny transparent idea
Your home is valueble for me. Thanks!…
I wish to convey my admiration for your generosity for people who should have assistance with that area of interest. Your real dedication to getting the message around has been incredibly significant and have in every case helped professionals like me to get to their ambitions. Your personal helpful recommendations indicates a whole lot to me and substantially more to my peers. Warm regards; from everyone of us.
I’m still learning from you, but I’m making my way to the top as well. I certainly love reading everything that is posted on your website.Keep the posts coming. I loved it!
Wow, awesome weblog structure! How lengthy have you ever been blogging for? you made running a blog glance easy. The whole glance of your site is wonderful, as neatly as the content!
Im no longer certain where you’re getting your information, but great topic. I must spend some time studying much more or figuring out more. Thank you for wonderful info I used to be searching for this info for my mission.
I have been surfing online greater than three hours these days, but I never found any interesting article like yours. It?¦s beautiful worth enough for me. In my view, if all website owners and bloggers made just right content as you probably did, the net will be much more useful than ever before.
This blog is definitely rather handy since I’m at the moment creating an internet floral website – although I am only starting out therefore it’s really fairly small, nothing like this site. Can link to a few of the posts here as they are quite. Thanks much. Zoey Olsen
Appreciate it for helping out, fantastic info .
Woh I love your blog posts, bookmarked! .
Its excellent as your other articles : D, regards for posting.
Pretty! This was a really wonderful post. Thank you for your provided information.
Awsome blog! I am loving it!! Will come back again. I am taking your feeds also.
Keep functioning ,fantastic job!
I believe this internet site has got some rattling wonderful info for everyone :D. “Nothing surely is so disgraceful to society and to individuals as unmeaning wastefulness.” by Count Benjamin Thompson Rumford.
You made some respectable factors there. I appeared on the internet for the problem and found most people will associate with along with your website.
I don’t ordinarily comment but I gotta state regards for the post on this amazing one : D.
It?¦s actually a cool and helpful piece of info. I?¦m glad that you shared this useful information with us. Please stay us up to date like this. Thank you for sharing.
hello there and thank you for your information – I’ve certainly picked up anything new from right here. I did however expertise several technical points using this site, since I experienced to reload the site a lot of times previous to I could get it to load correctly. I had been wondering if your web host is OK? Not that I’m complaining, but sluggish loading instances times will often affect your placement in google and could damage your high-quality score if ads and marketing with Adwords. Anyway I am adding this RSS to my email and can look out for a lot more of your respective fascinating content. Make sure you update this again very soon..
Thanks for the good writeup. It in reality used to be a entertainment account it. Look complicated to more delivered agreeable from you! By the way, how can we keep up a correspondence?
You are my inhalation, I possess few web logs and infrequently run out from to brand : (.
very good put up, i definitely love this web site, keep on it
Hi there, I found your website by means of Google while looking for a comparable subject, your website came up, it appears good. I have bookmarked it in my google bookmarks.
Simply desire to say your article is as surprising. The clarity in your post is just excellent and i could assume you are an expert on this subject. Fine with your permission allow me to grab your RSS feed to keep up to date with forthcoming post. Thanks a million and please carry on the gratifying work.
I’m really enjoying the theme/design of your blog. Do you ever run into any browser compatibility problems? A number of my blog audience have complained about my website not working correctly in Explorer but looks great in Chrome. Do you have any tips to help fix this issue?
excellent points altogether, you simply gained a brand new reader. What would you suggest about your post that you made some days ago? Any positive?
At this time it appears like WordPress is the top blogging platform available right now. (from what I’ve read) Is that what you are using on your blog?
Pretty section of content. I just stumbled upon your blog and in accession capital to assert that I get in fact enjoyed account your blog posts. Any way I’ll be subscribing to your feeds and even I achievement you access consistently rapidly.
Some genuinely choice content on this website , bookmarked.
I?¦ve read several excellent stuff here. Definitely worth bookmarking for revisiting. I surprise how a lot attempt you put to make such a fantastic informative web site.
Hi, I think your site might be having browser compatibility issues. When I look at your website in Safari, it looks fine but when opening in Internet Explorer, it has some overlapping. I just wanted to give you a quick heads up! Other then that, fantastic blog!
Good day! Do you know if they make any plugins to assist with SEO? I’m trying to get my blog to rank for some targeted keywords but I’m not seeing very good gains. If you know of any please share. Cheers!
Hello, you used to write wonderful, but the last few posts have been kinda boring… I miss your super writings. Past several posts are just a little out of track! come on!
Thanks for every other magnificent post. Where else may just anybody get that type of information in such an ideal means of writing? I have a presentation next week, and I am at the look for such information.
I’d constantly want to be update on new blog posts on this web site, saved to fav! .
Great wordpress blog here.. It’s hard to find quality writing like yours these days. I really appreciate people like you! take care
The Pink Salt Trick is a minimalist but effective morning routine: Just drink a glass of lukewarm water mixed with a pinch of Himalayan pink salt as soon as you wake up.
Hey there! Do you know if they make any plugins to safeguard against hackers? I’m kinda paranoid about losing everything I’ve worked hard on. Any tips?
It is truly a great and helpful piece of information. I am satisfied that you shared this helpful information with us. Please stay us up to date like this. Thanks for sharing.
hi!,I like your writing so much! share we communicate more about your article on AOL? I require an expert on this area to solve my problem. May be that’s you! Looking forward to see you.
My programmer is trying to persuade me to move to .net from PHP. I have always disliked the idea because of the expenses. But he’s tryiong none the less. I’ve been using WordPress on a number of websites for about a year and am anxious about switching to another platform. I have heard very good things about blogengine.net. Is there a way I can import all my wordpress content into it? Any help would be greatly appreciated!
Respect to author, some wonderful selective information.
Real fantastic info can be found on website. “Prayer is the wing wherewith the soul flies to heaven, and meditation the eye wherewith we see God.” by Ambrose of Milan.
The Pink Salt Trick is a minimalist but effective morning routine: Just drink a glass of lukewarm water mixed with a pinch of Himalayan pink salt as soon as you wake up.
As a Newbie, I am constantly exploring online for articles that can help me. Thank you
Absolutely written articles, Really enjoyed looking through.
I will right away grasp your rss as I can not to find your email subscription link or e-newsletter service. Do you have any? Kindly allow me recognise in order that I may just subscribe. Thanks.
I am extremely impressed with your writing skills and also with the layout on your weblog. Is this a paid theme or did you customize it yourself? Either way keep up the excellent quality writing, it’s rare to see a nice blog like this one today..
Absolutely written content material, Really enjoyed studying.
Hello there, simply changed into alert to your weblog via Google, and located that it’s really informative. I am gonna be careful for brussels. I’ll be grateful for those who proceed this in future. Many folks will likely be benefited out of your writing. Cheers!
I discovered your blog site on google and check a few of your early posts. Continue to keep up the very good operate. I just additional up your RSS feed to my MSN News Reader. Seeking forward to reading more from you later on!…
It’s laborious to seek out knowledgeable people on this topic, however you sound like you already know what you’re talking about! Thanks
Real informative and wonderful complex body part of written content, now that’s user friendly (:.
I do not even know how I stopped up right here, however I thought this submit was once great. I don’t realize who you’re however certainly you are going to a well-known blogger when you are not already 😉 Cheers!
What i do not realize is in reality how you are now not actually much more neatly-liked than you may be right now. You’re so intelligent. You already know therefore considerably when it comes to this topic, produced me in my view believe it from a lot of various angles. Its like men and women aren’t fascinated until it?¦s one thing to do with Lady gaga! Your personal stuffs excellent. At all times maintain it up!
I keep listening to the rumor talk about getting boundless online grant applications so I have been looking around for the most excellent site to get one. Could you advise me please, where could i acquire some?
I believe other website owners should take this site as an model, very clean and superb user friendly design.
Excellent post. I was checking constantly this blog and I am impressed! Very useful info specially the last part 🙂 I care for such information much. I was seeking this particular information for a very long time. Thank you and good luck.
As a Newbie, I am continuously searching online for articles that can benefit me. Thank you
I really like your writing style, good info, regards for posting :D. “Inquiry is fatal to certainty.” by Will Durant.
Outstanding post, you have pointed out some wonderful points, I too believe this s a very great website.
I’m not sure why but this site is loading extremely slow for me. Is anyone else having this problem or is it a issue on my end? I’ll check back later and see if the problem still exists.
I regard something genuinely special in this internet site.
Hey! This is my first visit to your blog! We are a team of volunteers and starting a new project in a community in the same niche. Your blog provided us useful information to work on. You have done a outstanding job!
I do love the manner in which you have presented this situation and it does offer me some fodder for consideration. Nevertheless, coming from everything that I have observed, I only hope as the actual feedback pack on that people today stay on issue and don’t embark upon a tirade associated with the news du jour. All the same, thank you for this exceptional point and while I do not really go along with this in totality, I regard the point of view.
But wanna remark on few general things, The website pattern is perfect, the content is very good. “Some for renown, on scraps of learning dote, And think they grow immortal as they quote.” by Edward Young.
After all, what a great site and informative posts, I will upload inbound link – bookmark this web site? Regards, Reader.
Hello! This is my first visit to your blog! We are a collection of volunteers and starting a new project in a community in the same niche. Your blog provided us valuable information to work on. You have done a outstanding job!
Thankyou for this terrific post, I am glad I noticed this website on yahoo.
You really make it seem so easy with your presentation but I find this matter to be really something which I think I would never understand. It seems too complicated and extremely broad for me. I’m looking forward for your next post, I’ll try to get the hang of it!
Great website. A lot of helpful information here. I am sending it to several pals ans also sharing in delicious. And obviously, thank you for your effort!
Hiya, I am really glad I’ve found this info. Nowadays bloggers publish only about gossips and web and this is actually annoying. A good site with exciting content, that is what I need. Thank you for keeping this web site, I will be visiting it. Do you do newsletters? Can not find it.
very nice publish, i certainly love this web site, keep on it
Only wanna comment on few general things, The website layout is perfect, the content is very great : D.
Loving the information on this site, you have done outstanding job on the articles.