Industry Commentary: Automotive Reconditioning - KSLA

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An Industry Ripe for Consolidation

Published: Oct. 26, 2021 at 7:00 AM CDT|Updated: 1 hour ago

CLEARWATER, Fla., Oct. 26, 2021 /PRNewswire/ -- Colonnade Securities LLC ("Colonnade") released a report on the automotive reconditioning industry. The report can be accessed here.

Automotive reconditioning is the process of preparing a vehicle at a dealership to be retail-ready. All new and used cars go through reconditioning before being put on the dealership lot. Services include wheel repair, exterior repair, paint, paintless dent repair (PDR), interior restoration, and detailing services. Many dealerships outsource reconditioning to optimize operations and decrease inventory turn-times.

The automotive reconditioning industry is $5.4 billion, fragmented, and ripe for consolidation. Most of the reconditioning outsourcing is to self-employed specialists who serve a single or a few stores. Management of outsourcing to sole proprietors is inefficient for dealerships. There is an unmet need for reconditioning companies with the scale to provide all the necessary reconditioning services coupled with sophisticated management systems that enhance transparency and performance.

In this paper, we cover five primary themes:

• Dealerships outsource reconditioning to optimize operations;
• Automotive reconditioning industry is highly fragmented and lacks companies with scale;
• More than ever, dealerships need to make vehicles retail-ready as quickly as possible;
• Dealerships have competing stresses: maximizing profits from fixed operations and turning inventory quickly; and
• Industry is ripe for consolidation.

Similar to the ongoing consolidation that we have seen in the collision center industry over the past five years, we expect robust M&A activity in the automotive reconditioning industry.

About Colonnade Securities LLC:
Colonnade is an independent investment bank focused on the financial services and business services sectors. Colonnade provides expert, objective advice on mergers and acquisitions and capital raising for privately held businesses, publicly traded companies and financial sponsors. Our senior bankers bring extensive transaction experience, industry expertise, a process orientation and a sense of urgency to each engagement. Please visit our website at www.ColAdv.com

For more information, please contact:
Gina Cocking	Tiffany Hu
Managing Director & CEO	Director of Business Development
312.425.8145	312.870.6204
gcocking@coladv.com	thu@coladv.com

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SOURCE Colonnade Securities LLC

The above press release was provided courtesy of PRNewswire. The views, opinions and statements in the press release are not endorsed by Gray Media Group nor do they necessarily state or reflect those of Gray Media Group, Inc.

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