Private equity funds find way into VSC space with deal involving APC Integrated Services Group

GREENWICH, Conn., and CHESTERFIELD, Mo. - 

Private equity money is flowing into all aspects of F&I, not just high-level technology involving originations, but also the potentially lucrative vehicle-service-contract segment.

Southfield Capital recently announced an investment in APC Integrated Services Group, a provider of consumer marketing of vehicle service contracts on behalf of dealers, manufacturers and other partner channels. A news release indicated APC’s senior management team including Kyle McEvoy, Ken Murer, David Diem and Todd Johansen will be continuing in their current roles.

Founded in 2000 by Ken Murer, a 22-year veteran of the VSC after-sale market industry, APC is headquartered in Chesterfield, Mo. The company creates revenue generating programs using advanced database marketing to sell automotive VSCs and ancillary products on behalf of dealers and manufacturers.

Through its multichannel marketing services, APC sells VSCs and ancillary programs directly to consumers outside of the point of vehicle sale for original equipment manufacturers, administrators and dealerships. APC has grown its VSC originations by a 54-percent annualized growth rate in recent years and nearly doubled its workforce.

“In taking the next step for our company, we wanted to find a partner that values our quality service delivery above all else,” said McEvoy, who is APC’s president. “We have taken the time to build APC through results for our customers, and we knew we could find that with Southfield.

“We very much look forward to further building our brand in the industry and to enhance our ability to serve the market with an end-to-end solution,” McEvoy continued.

Southfield Capital is a private equity firm that invests in high-growth, lower middle market companies in the outsourced business services sector. The firm targets companies with $4 million to $12 million in EBITDA and partners with management to scale the business through a combination of organic and acquisition growth strategies.

Southfield also owns Vanguard Dealers Services, Dealership Development and Centurion Automotive Products, premier agents and administrators of F&I products and services to franchised dealers nationwide.

Southfield partner Andy Cook commented on the APC partnership, saying, “Kyle, Ken, David and Todd have built an exceptional business around a core of highly skilled employees and a blue-chip customer base. APC has become the leader in vehicle service contract marketing through attention to detail and dedication to the customer.

“Southfield looks forward to supporting APC as they expand their service offering to better serve their customers. We could not be more enthusiastic to partner with the APC team as the business goes to the next stage,” Cook continued.

Colonnade Securities, a boutique investment banking firm that specializes in merger and acquisition advisory services, acted as the transaction adviser to APC. APC’s President, Kyle commented,

“We cannot say enough about Colonnade’s effort on our transaction,” McEvoy said. “They put in long hours and hard work on APC’s behalf. We could not have completed this process without Colonnade.”

Murer added, “Colonnade’s efforts to place APC with the right visionary partner like Southfield Capital, helps complete our vision to bring our greatly needed solution to the entire automotive industry. We now have the ability to expand our truly world-class end-to-end program as a result of this transaction.”

Lewis Rice provided legal counsel to APC. Finn Dixon & Herling provided legal counsel to Southfield. East West Bank led the funding syndicate for the transaction.

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