AutoCanada’s executive chairman, Pat Priestner, announced this week that he is purchasing a Honda dealership via his holding company and a financing arrangement it has with AutoCanada.
Priestner will own 100 percent of the equity and voting shares of the holding company, PPH, which was formed for the purpose of purchasing the Honda dealership, Whitby Oshawa Honda in Whitby, Ontario.
The store has been operating in the Whitby/Oshawa area for over 25 years and sold 812 new vehicles and 725 used vehicles last year.
"I am extremely excited about receiving Honda Canada's approval to purchase this great dealership,” Priestner said. “The Honda brand is one of the leading brands in the world automotive market and represents a significant milestone for me. I would like to thank Honda Canada and the entire Honda team for all of their hard work and assistance with this transaction. I look forward to developing a long term, mutually rewarding partnership.”
According to the AutoCanada, the financing arrangement between the group and PPH is that the former will receive approximately 80 percent of the net income of Whitby Oshawa Honda in exchange for providing a participatory loan to PPH to fund 80 percent of the purchase price of the dealership.
The transaction has been received and approved by AutoCanada’s independent board of directors.
Assurant Solutions announced this fall that it has expanded its vehicle service capabilities via the acquisition of Coast To Coast Dealer Services, a Canadian auto-service contract company.
Coast To Coast, founded in 1990 and headquartered in Hamilton, Ontario, is best known for providing service contracts for used vehicles, along with new-vehicle contracting and ancillary auto products for more than 1,000 dealerships in North America.
The company has been a distribution partner for Assurant Solutions in Canada for over 12 years.
“We are excited to welcome our new colleagues into the Assurant family,” said Bob Zanussi, president and chief executive officer at Assurant Solutions Canada. “Coast To Coast’s capabilities and talented customer care team strengthens our ability to provide vehicle service contract offerings that provide exceptional customer value and peace of mind to vehicle owners.”
According to Assurant, Bill Wereha, Coast To Coast’s founder and president, will remain with the company during the transition to facilitate the integration.
“As partners, Coast To Coast and Assurant Solutions have achieved much success over the years,” Wereha said. “Together as one company, we believe we will enjoy even greater achievements as we take advantage of greater financial resources to better meet the needs of our customers and policyholders.”
To learn more about Assurant Solutions, visit its site here.
About four-and-a-half months ago, Cox Automotive announced a new position dedicated specifically to head up its Canadian operations, hiring former Kia executive Maria Soklis for the role.
When Soklis was named president of Cox Automotive Canada on May 19, Joe George — senior vice president of Cox Automotive Strategy — said in a news release the hire was just one step in a “long journey” of business growth in Canada.
It appears the latest major acquisition news from Cox Automotive — the finalization of its Dealertrack Technologies purchase last week — may be another big step in that journey.
The Dealertrack purchase is a “real positive” in terms of impact on Canadian operations, said Cox Automotive president Sandy Schwartz. But don’t expect too much change overnight. There isn’t necessarily a concrete game plan yet for exactly how much things will change with Dealertrack in the Canadian fold, he said.
However, buying Dealertrack certainly offers Cox Automotive a way to bring more value for Canadian dealers, Schwartz said.
“We’re really, now, looking at the assets we have; this gives us more,” Schwartz said in an interview with Auto Remarketing last week. “And again, that isn’t for us to be big — that’s for what we can offer dealers.
“So, I think it’s a real positive, but I have to tell you that it’s an integration work stream that’s probably a little farther down the road that we’re not going to tackle tomorrow,” he said. “But we will look at it.
“And, you know, one of the great things about working for me is I try to stay out of the details and let the people who are much smarter than me do it,” Schwartz continued. “So, Maria (Soklis) will figure out what Dealertrack has up there. The Dealertrack people will figure out what we have up there, and together we’ll see what we can do to be additive to dealers in Canada and to OEMs.”
Schwartz went on to share his excitement about what the Dealertrack purchase brings to Cox Automotive Canada, pointing out that while Canada might not be massive market, “it’s a good market, an important market.”
He gave the example of Cox Automotive’s vAuto subsidiary, which has a strong presence in Canada. And just this week, in fact, Cox Automotive Canada boosted its offering in the west with Manheim Vancouver hosting its first dealer sale.
Again, the Dealertrack acquisitions seems to be another step in that direction of Canadian growth.
“I think it gives us more opportunity, but I can’t tell you there’s a plan that says we want to grow by this much or we want to do this,” Schwartz said. “Canada is a close-knit market; it’s a competitive market and (the Dealertrack purchase) gives us a better stake there, because we have more products and services we can offer to dealers.”
A major move in consumer vehicle finance was announced today. Industrial Alliance Insurance and Financial Services Inc. (iA Financial Group) have entered into an agreement to acquire Ontario-based CTL Corp.
CTL Corp. is the largest privately-owned consumer vehicle finance company in Canada. The companies reported the transaction was completed on Friday.
CTL — a non-traditional credit lender — comes with a loan portfolio of more than $100 million originated through a network of dealers across Canada, the companies reported.
The sale is immediately accretive and is expected expected to contribute full-year earnings of $0.04 per share. The impact on the solvency ratio will be a decrease of approximately 4 percent, the companies shared.
"This strategic acquisition expands the breadth of financial and insurance products that we currently offer through car dealers, and is expected to accelerate the development of our Dealer Services division across Canada," commented Denis Ricard, executive vice president of iA Financial Group. "CTL brings valuable credit analysis, underwriting and collection expertise and systems for a diverse suite of car loans across the credit spectrum. We look forward to working together and view their addition to the Industrial Alliance family as important to the continued success of our car dealer business."
Jeffrey Newhouse, president of CTL, also expressed his enthusiasm for the deal: "We are excited to join such a dynamic and forward-thinking organization. iA has demonstrated its commitment to enhancing its car dealer experience.
“Being part of iA's Dealer Services division, we anticipate our synergies will strengthen our competitive advantage, while adding significant value to the services offered to Canadian consumers looking to acquire a vehicle through our network of dealer partners,” he continued.
RBC Capital Markets acted as exclusive financial advisor to CTL Corp.
AutoCanada Inc. announced earlier this week that it has reached an agreement to acquire the operating assets of a Chrysler Dodge Jeep Ram dealership in Spruce Grove, Alberta.
The dealership, Grove Dodge Chrysler Jeep Ltd., otherwise known as Grove Dodge, is owned and operated by Terry Martens and Josh Davis. AutoCanada says Davis will remain with the dealership and will retain a 10 percent ownership interest.
“Grove Dodge has a strong history in the Spruce Grove region and we look forward to solidifying our very strong Chrysler Dodge Jeep Ram platform in Alberta, which now represents three dealerships in each of the key Calgary and Edmonton regions,” said Tom Orysiuk, president and chief executive officer of AutoCanada. “Although currently challenged, the Alberta market has been a long-standing above-average performer in retail automotive and we expect this market to continue to perform.
“We consider Grove Dodge to provide the company an opportunity to further deliver long-term shareholder value through the acquisition of a great dealership at a time when it became available,” Orysiuk continued.
The dealership operates in a 34,000 square foot leased facility, featuring an eight-car showroom, 13 service bays, three details bays and one alignment bay. The dealership retailed 809 new and 407 used vehicles in 2014.
The deal is expected to close within 30 days.
Last week, to cap off its User Summit, DealerSocket announced a development with Dealertrack Technologies, impacting the companies’ U.S. and Canadian customers.
The two technology companies entered into a definitive agreement under which DealerSocket will acquire Dealertrack’s Inventory+ business in an all-cash transaction for approximately $55 million.
Dealersocket management said the acquisition will bring over 3,000 more dealers into the company’s customer base.
Under the terms of the agreement, Dealertrack’s Inventory+ suite of inventory management solutions, including its AAX product in the U.S. and Canada, as well as its eCarlist websites, will be acquired by DealerSocket.
Officials indicated DealerSocket’s acquisition of Dealertrack’s Inventory+ business and Dealertrack’s acquisition by Cox Automotive are both expected to be completed by the end of the third quarter, subject to regulatory approval. They added Dealertrack’s Canadian Tradetracker product and Central Dispatch are not part of the transaction with DealerSocket.
The companies also said DealerSocket’s acquisition of Inventory+ is contingent upon approval by the Department of Justice in connection with the DOJ’s review of the pending acquisition of Dealertrack by Cox Automotive.
Dealertrack, DealerSocket and Cox Automotive are working cooperatively and expeditiously with the DOJ in connection with its review process, according to a statement released on Thursday.
“As we work to complete our transaction with Cox Automotive, DealerSocket’s acquisition of our Inventory+ business is a great result for our Inventory+ employees, customers, and our company as a whole,” said Mark O'Neil, chairman and chief executive officer of Dealertrack.
“Seamlessly transitioning our Inventory+ team members and customers to DealerSocket is our top priority,” O’Neil added.
DealerSocket recapped that Inventory+ can help dealers centralize and standardize the inventory management process, gain data-driven insights, and maximize profitability.
“We are pleased to be bolstering DealerSocket’s comprehensive website solutions, customer relationship management and training solutions with the highly complementary inventory management services available through Inventory+,” said Jonathan Ord, chief executive officer of DealerSocket.
“We look forward to welcoming the Inventory+ team to our organization and to working together to ensure a smooth transition for customers,” Ord went on to say.
DealerSocket discusses why Dealertrack tool is good fit
DealerSocket CEO Ord described it as “very humbling” to have a conversation with employees last week when the technology company first announced the Dealertrack Inventory+ purchase.
Ord made that statement since DealerSocket has gone from an idea sprouted in a garage with fellow founder Brad Perry to the point where the company is making acquisitions costing more than $50 million.
This development arrived after DealerSocket added DealerFire, FEX DMS and AutoStar Solutions to its dealer technology portfolio to enhance its marketing theme of, “We are automotive.”
Ord touched why DealerSocket added these Dealertrack assets when he addressed dealer clients hours after the acquisition announcement when the company hosted its User Summit in San Diego.
“One of the main criteria to acquiring companies is that we acquire teams and product lines that think the same way we do and can integrate well into our culture,” Ord said during his closing address posted online here.
“To our customers, to our employees, we are so ready for the future. We are so excited about the next step in changing the world,” he continued.
DealerSocket’s employee and customer count jumped via the latest acquisition, which is expected to be completed by the end of the third quarter. The company added 209 employees who worked with Dealertrack to run the inventory tool.
“We’ve been watching that business for a long period of time,” said Ord, adding that a current DealerSocket executive helped to develop the AAX product before it became a part of the Dealertrack portfolio several years ago.
“Dealertrack had the asset and did a bunch of good things with it. It’s a great value proposition for us and for our customers. We look forward to integrating that inventory management functionality,” he continued.
Ord said the deal brings 3,388 dealer customers into the DealerSocket family, as well.
“Some of that is overlap with our current customer base, but much of it is green field and white space where we can help all of those customers use better CRM, website and inventory technologies,” he said.
Ord spent the remainder of his time on stage at the DealerSocket event thanking dealer customers for attending in hopes each one received more skills and resources to improve their businesses.
“Go back to your stores and be a change agent,” Ord said.
Enterprise Holdings recently announced its regional subsidiary, the Enterprise Rent-A-Car Canada Company, has acquired Toronto-based Metavera Solutions Inc.
Metavera, a provider of car sharing technology, works to provide transportation technologies to customers in over a dozen countries.
The company was founded in 2000 and primarily offers a car sharing system for independent operators, as well as technology solutions for fleet management and peer-to-peer car sharing.
"For more than a decade, our team has been focused on creating intelligent systems that change the way people drive, and we look forward to continuing that tradition of innovation with Enterprise," said Tony Simopoulos, founder and president of Metavera. "Enterprise shares our commitment to investing in people, communities and sustainable transportation solutions.
"This combination not only is a natural fit for our business, but also a testament to the ingenuity of our employees."
Enterprise Holdings explained it bought the company for its car-sharing technology and industry expertise, which it said will work to support the ongoing evolution of its Enterprise CarShare operation. Terms of the transaction were not disclosed.
"Uniting our business expertise with Metavera's technology and industry-leading talent will enable us to enhance both our technology and the service we offer," said Greg Stubblefield, chief strategy officer and executive vice president for Enterprise Holdings.
Enterprise asserted it will work with current Metavera customers and partners to ensure a smooth transition for all stakeholders, and all Metavera employees will be retained. The company will continue to operate in Toronto.
Toronto-based Element Financial Corp. announced today that it is purchasing GE Capital’s remaining fleet operations in the U.S. and Mexico, and Australia and New Zealand — an all-cash deal worth $8.6 million in Canadian dollars.
Element had previously acquired the Canadian operations of GE Capital’s North American fleet management business in June of 2013.
“Adding these very high quality businesses to our existing fleet operations firmly establishes Element as a leader in the North American fleet management industry,” said Steven Hudson, Element’s chief executive officer. “But more importantly, by combining these businesses we’re being given an unprecedented opportunity to bring together the systems, technologies, products and people that have helped to define excellence in the fleet management industry in North America for more than five decades.”
Though the transaction is subject to regulatory and other approvals, the U.S. & Mexico transaction is expected to close in the third quarter of 2015, and the Australia and New Zealand transaction in the fourth quarter of 2015, subject to the receipt of these approvals.
If all goes well, on the closing of the transaction Element’s combined fleet management operations will include more than 1 million vehicles under contract and net earning fleet assets of more than C$13 billion. The company’s total assets will exceed C$21 billion.
Highlighting a few specifics regarding the transaction, on top of the purchase of the net earning assets in the U.S., Mexico, Australia and New Zealand, the transaction also includes the transfer of the employees, systems, offices, agreements, intellectual property and other assets required to operate the acquired fleet management businesses in these jurisdictions, the company explained.
In other news stemming from Element today, the company confirmed that Paris-based Arval — a wholly-owned subsidiary of BNP Paribas and Element’s founding partner in the Element-Arval Global Alliance — has entered into a memorandum of understanding to acquire GE Capital’s European fleet operations.
“Together, these two transactions signal a new level of collaboration between Element and Arval in serving the global fleet management needs of international customers,” company management shared.
Upon the closing of these two deals, the Element-Arval Global Alliance will now be capable of managing customer fleets in more than 40 countries.
“We see the opportunity to expand our fleet management operations into Australia and New Zealand as an excellent fit with our established North American operations,” said Bradley Nullmeyer, Element’s president. “In addition to strengthening our ability to support international fleet customers through these transactions, we believe the economic scale of Element’s expanded fleet management enterprise will enable us to accelerate the development and deployment of the next generation of advanced fleet analytics and data benchmarking tools.
“These expanded and enhanced service offerings will further differentiate Element Fleet Management in the market and deliver incremental cost savings for our fleet customers.”
The North American-based portion of the GE portfolio represents C$5.3 billion of the net earning assets acquired by Element, and the Australia and New Zealand-based portions represents C$1.8 billion.
The transactions will be an ongoing process as the companies have entered into a transition services agreement between Element and GE under which GE will provide various services during the transition period, ensuring a smooth transition for customers.
The company explained integration plans will be finalized prior to closing in an effort to align the fleet management operations of the two companies.
“While the continued consolidation of the North American industry will present further opportunities for the Company, management’s focus and discipline will be on delivering value to our shareholders and customers through the integration of these acquired GE fleet operations,” said Hudson.
There was a bit of movement this week in the automotive rewards and customer incentives industry for dealerships in Canada.
Ackroo Inc., which specializes in loyalty and rewards technology, has purchased Dealer Rewards Canada.
Dealer Rewards Canada is a loyalty rewards company tailored specifically to the automotive sector.
With the purchase, Ackroo is also gaining the assets of Dealer Rewards Canada's affiliate Evolve Automotive Group, who provides collateral and billing support for Dealer Rewards Canada customers.
Through the deal, Ackroo will inherit the 107 dealerships in Canada that Dealer Rewards Canada supports and will also gain exclusive licensing rights to their platform in Canada along with non-exclusive rights into the US.
Steve Levely, chief executive officer at Ackroo, gave a bit of background to the purchase, noting that Dealer Rewards Canada was one of his company’s direct competitors.
“The acquisition of Dealer Rewards Canada is an exciting win for Ackroo,” said Levely. “Dealer Rewards has been a direct competitor in the automotive space for many years and have done an excellent job of evolving their product and supporting and growing their customer base.”
“Last year, we went into a partnership with Dealer Rewards to help grow each other's business in this segment, with the goal being to consolidate at some point in the future. I am excited that the timing was right for both parties to have us acquire these assets in an effort to further grow this business,” he continued. “We will have access to supporting and promoting their platform, have their great customer base to nurture and grow and are adding significant recurring revenue to our business. An exciting win on many fronts for Ackroo and falls completely in line with our acquisition and growth strategy.”
As for some specifics behind the deal, Ackroo will make payments totaling $1.5 million over an 18-month term, and will issue 769,231 common shares. The cash payment is subject to adjustment based on performance goals for the Dealer Rewards business.
The deal remains subject to the final approval of the TSX Venture Exchange.
“I am excited about this opportunity and I feel confident that Ackroo's acquisition of the Dealer Rewards Canada assets will be a seamless transition for our current client base,” said Tim Doyle, president of Dealer Rewards Canada. "Our main priority is to ensure our clients are in good hands and we are certain that Ackroo will do a great job of supporting, sustaining and growing our customers.
“Dealer Rewards will now concentrate on improving our services, growing our US customer base and expanding into other markets. This is a great opportunity for both Ackroo and Dealer Rewards and I look forward to the 'partnerships' going forward with Steve and his team.”
The Canadian government announced on Monday that is has entered an agreement to sell all of its remaining shares, totaling more than 73 million, of General Motors Co. common stock.
The unregistered block trade, between the Canada GEN Investment Corporation, a Canadian federal Crown corporation, and Goldman, Sachs & Co., will complete the sale of 73,389,831 GM shares this Friday.
According to a release from the corporation, further details on the share sale will be made available when the trade has been reported with the United States and Canadian securities regulators in the next few days.
The proceeds of the sales, denominated in U.S. dollars, will be converted gradually to Canadian currency over a period of time by the Canadian government.
