Vista Equity — Now a Major Player in Automotive Retail

Vista Equity — Now a Major Player in Automotive Retail

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September 14, 2015 — Last year, more than $30 billion in equity changed hands among automotive retail vendors in what was a record year for the industry. Already in 2015, there have been 19 acquisitions for an estimated combined $8 billion. With two more monster deals pending, the number could easily exceed $20 billion.
 Last year’s $30 billion includes IPOs, investments and acquisitions. This year, the $8 billion (and potential $20 billion) represents acquisitions only.

The latest deal was signed yesterday as Vista Equity agreed to buy Solera Holdings for $3.7 billion in cash ($6.5 billion including Solera’s debt) — or $55.85 a share. Solera closed Friday trading at 49.45 a share. The final price gives Solera investors an approximate 53% premium over its stock price of just over $36 about a month or so ago. The deal is expected to close sometime in the first quarter of 2016. Koch Equity Development and an affiliate of Goldman Sachs are helping to finance the acquisition.

Solera is a company that was highly leveraged due to numerous acquisitions its made the last couple of years. Investors wanted to see more value from their investments, and the board decided selling the company would be the best way to accomplish that. The company was founded by Tony Aquila in January 2005 and generated approximately $1 billion in 2014. It became a leader in risk and asset management software providing solutions to automotive insurance firms, along with service repair and collision companies.
The move is significant because Vista also owns DealerSocket, one of the top CRM firms in the automotive retail space. Make no mistake, this is a big deal as it now puts two significant vendors under the same ownership. Solera owns DME Automotive and AutoPoint (MPi). Meanwhile, this could turn into a significant data play also — especially in marketing to potential service and repair customers.
We expect Vista will put the two companies together and execute a spin off within three to five years. (Vista at one point, had a strong relationship with Reynolds and Reynolds but sold its stake in the DMS firm last December). Meanwhile, we suspect Robert Smith, Vista’s founder and chairman and CEO, might be fun to watch the next couple of years.
(For complete analysis of vendor acquisitions by The Banks Report, click here.)
VISTA EQUITY’S AUTOMOTIVE RETAIL COMPANIES
Solera Holdings (Acquisitions in 2015)
  • Service Dynamics: Online scheduling for service departments
  • Cima Systems: Service marketing
  • DME Automotive: Full scale marketing solutions for service departments (deal was for $142.5 million)
  • Identifix: Solera completed the acquisition it began in October of 2013 when it created a joint venture with private equity group Welsh Carson Anderson & Stowe. Identifix provides data and solutions that help dealers and independent repair shops increase their efficiency and profitability.
  • Autodata B.V.: Netherlands-based company with vehicle valuation, inventory management and workflow solutions

DealerSocket:

  • AutoStar Solutions: DMS for used vehicle and buy-here-pay-here dealerships
  • FEX: DMS for used-car dealers
  • DealerFire: Website company
  • Inventory+: Formerly known as AAX, is the second leading inventory management solution (behind vAuto)

OTHER ACQUISITIONS (list of acquisitions in the automotive retail space this year) 

DealerTrack (deal to be acquired by Cox Automotive is pending and should be completed in the next two weeks):

  • incadea: Global Dealer Management System (DMS)

KAR Auction Services:

  • DataScan: Vehicle inspection solution
  • Autoniq: provides real time pricing and market reports for dealers to use while in the auction lane
  •  MobileTrac (InstaVIN): Vin scanner that provides vehicle history reports and lets dealers structure deals for customers
  • Used Vehicle Auction in Pittsburgh

J.D. Power and Associates:

  • NADA Used Car Guides

Autobytel:

  • Dealix

Reynolds and Reynolds:

  • OnLineDrive

Spireon

  • Inilex

HGGC (Private Equity)

Dealer FX: (for more on this deal click Here.

Urban Science

  • AutoHook (from HookLogic)

Cox Automotive:

  • DealerTrack: Deal is under Department of Justice review and should close by the end of the third quarter
  • Vinli: investment in a connected car solution

CDK Global (is talking with private equity firms about potential acquisition):

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