Vanguard Dealer Services — an agent and administrator of F&I products and services to franchised dealers nationwide — formed a partnership this week with Southfield Capital, a lower middle market private equity firm.

Officials indicated Vanguard's senior management, including chief executive officer Jim Polley along with Ed Reitz and Mike Seergy, will continue in their current operating roles and will maintain a shareholding in the company.

Additional terms of the transaction were not disclosed.

“The Vanguard team is very excited to announce our partnership with Southfield Capital,” Polley said. “We have ambitious plans to grow Vanguard into the nation's preeminent provider of F&I products and services through a combination of acquisitions and the introduction of new products and services.

“We needed a partner that has experience executing roll-up strategies and the operational expertise to ensure that we scale the business appropriately as we grow,” he continued. “Southfield’s excellent track record with companies similar to Vanguard gave us confidence that they are the right partner for us. We are excited to implement our growth plans and develop a truly great company.”

Headquartered in Fairfield, N.J., Vanguard offers a full suite of proprietary and third party vehicle service contracts and ancillary products such as tire protection, key replacement, dent repair and pre-paid maintenance. The company also offers F&I consulting and reinsurance services focused on enhancing dealership profitability.

At the core of Vanguard’s value proposition is its ability to increase dealer profitability and customer retention. The company achieves this performance by leveraging its broad product offering and establishing best practice systems and processes, including F&I training, automotive management training, compensation plan development, dealer owned reinsurance, dealer incentive management, sales strategy and proficiency analysis, compliance review and F&I specialists staffing.

“We are thrilled to announce our investment in Vanguard and look forward to our partnership with the Vanguard team,” Southfield partner Andy Cook said.

“Jim Polley and his management team have developed a fantastic business which is now positioned for accelerated growth,” Cook continued. “Vanguard is a mission critical vendor to automotive dealers that increasingly rely on Vanguard’s products and services to drive profitability. Vanguard represents a compelling platform investment in a large and highly fragmented market.”

East West Bank provided the senior debt financing, and Fidus Investment Corp. provided the subordinated debt financing. Finn Dixon & Herling provided legal counsel to Southfield Capital. Woodbridge International acted as financial advisor to Vanguard and its shareholders.