Tony Wanderon had a busy start to 2023, highlighted by becoming CEO of APCO Holdings after it acquired National Auto Care (NAC).
Wanderon spent some time during NADA Show 2023 in Dallas for this episode of the Auto Remarketing Podcast recapping how the deal came together as well as current views of the F&I market.
To listen to the conversation, click on the link available below.
Download and subscribe to the Auto Remarketing Podcast on iTunes.
In a transaction one top executive called a “industry changing,” last week Reynolds and Reynolds announced the acquisition of American Guardian Warranty Services (AGWS), a provider of vehicle service contracts, limited warranties and other F&I products and services.
Reynolds said the acquisition will provide a “clear path” for dealers looking to streamline selling aftermarket products no matter where the customer is — online, in-store, or a combination of the two.
“Consumers are demonstrating that regardless of how they shop, they see growing value in F&I products. But they expect to be educated and they expect accurate pricing,” Reynolds president Chris Walsh said in a news release.
“AGWS has proven to be the leader in aftermarket product offerings and customer service, and Reynolds provides the tools to help sell effectively, rate products, and book contracts instantly no matter where the customer is.”
When the acquisition finalizes, Reynolds said the current AGWS leadership team will remain in place, adding that it believes in the value and importance of its people and the company looks forward to welcoming AGWS employees to its team.
“For 25 years, AGWS has grown and thrived as a leader, innovator, and important part of the F&I products business and retail vehicle industry,” said Jon Anderson, president of AGWS.
“Now, combined with Reynolds’ industry-leading technology and tools, like the docuPAD system and Gubagoo Virtual Retailing, dealers will be able to provide a seamless F&I selling experience for both their customers and their employees,” Anderson continued in the news release.
Reynolds executive vice president of corporate development Robert Burnett added, “The acquisition of AGWS shows Reynolds’ continued growth through strategic investments as we expand our footprint in retail automotive.
“Much like our acquisition of Proton Dealership IT last year, AGWS has established itself as a leader in the segment of the industry they are experts in,” Burnett went on to say.
The move is significant in many ways for AGWS co-founder Rogers Freedlund Jr., who will be retiring after more than 50 years in the industry upon completion of the transaction and a decades-long career of leading and building four companies.
“This opportunity brings together the immense skills, resources, and experience of two industry-leading companies. The outcome will be industry changing,” Freedlund said. “Thank you to all the AGWS team and everyone involved with this transaction.”
Katten Muchin Rosenman in Chicago served as legal advisor to AGWS on the transaction. Waller Helms Advisors served as exclusive financial advisor to AGWS on the transaction.
Colonnade Securities served as exclusive financial advisor to Reynolds. Colonnade was selected by Reynolds due to its position as a leading investment bank in mergers and acquisitions for the auto F&I industry.
“Reynolds and AGWS are a great fit together due to AGWS’s expertise and unrivaled service, and Reynolds’ knowledge, resources, and ability to scale,” Walsh said. “The quality products and services AGWS offers are an essential part of every automotive consumer’s journey, and an important part of the success of dealerships across the country.”
Allied Solutions began 2023 with a trio of significant moves, including an acquisition, a key executive promotion as well as an integration with another service provider in the collections space.
The newest announcement arrived on Tuesday when Allied Solutions said it has finalized an agreement to acquire majority ownership of Vero, a key product and services provider for the retail automotive and financial institution industries.
Company leadership said the move further expands Allied Solutions’ footprint in automotive aftermarket solutions and, along with previous investments in TrxNow, Deep Future Analytics and others, enhances the company’s capabilities in both consumer experience and technology solutions.
“We’re excited to welcome Vero to the Allied Solutions family,” Allied Solutions chief executive officer Pete Hilger said in a news release. “The value that Vero offers to dealers and credit unions in terms of operational support and efficiencies — combined with the experience and expertise of our own people — benefits both of our companies and clients.”
Allied Solutions emphasized that its long-standing relationship with Vero and company CEO Joe Annoreno ensures a bright future for Vero and its clients.
“This new agreement allows Vero’s clients to benefit almost immediately,” Annoreno said. “From our humble beginnings, Vero has grown by focusing on listening to and better serving the needs of our clients, and the capabilities that Allied Solutions will bring to our people expands our ability to continue to do just that.”
While Allied Solutions and Vero will continue to operate independently, the news release indicated the new agreement will enable each company to leverage the experience, expertise, and technology of the other to better serve their clients.
The announcement also highlighted that the arrangement enhances a strategic partnership between Allied Solutions and Origence, formerly CU Direct, and reinforces both companies’ commitment to provide financial institutions and automotive dealers with solutions that help them grow, protect, and evolve in an ever-changing market.
In personnel news, Allied Solutions promoted Mark Bugalski to senior vice president and chief growth officer in a move that became effective Jan. 1.
Bugalski most recently led the sales and marketing division for Allied’s Southern region, covering 13 states.
“We’ve got a talented and deep sales and marketing team at Allied,” Hilger said in another news release. “It’s a win-win when we develop and promote in-house talent to maintain continuity for our clients and customers. Mark is an industry leader and is well-positioned to support Allied’s continued growth and new market development.”
Bugalski has more than 30 years of experience in the financial services industry. He joined Allied Solutions in 2004 and began his career at Allied's parent company, Securian Financial.
Over a 12-month period, the company said Bugalski will partner with outgoing executive vice president and chief revenue officer David Underdale to ensure a smooth transition for clients and employees.
The company said Underdale plans to retire in December after a nearly 40-year tenure at both Allied Solutions and Securian Financial.
And in other news, Allied Solutions finalized an integration with cloud-based collections platform AKUVO.
The company said this integration will provide a powerful turn-key solution for finance companies to interface with Allied’s risk management suite and AKUVO’s collection platform.
“As financial institutions look to modernize their loan decision-making and collections processes, key platform integrations are critical factors,” Allied Solutions vice president Michael Bryan said. “Positive client experience is king when it comes to all parties involved in the collections process. Technology platforms can simplify and enhance this experience if you have the right solutions in place.
“And by combining the power of Allied’s award winning risk management solutions with AKUVO’s powerful collections platform, the down-stream positive impact to financial institutions can be significant in terms of efficiency gain and bottom-line results,” Bryan continued.
Steve Castagna is AKUVO’s chief revenue and operating officer.
“AKUVO is keenly focused on making collections a more streamlined process for financial institutions. The integration with Allied Solutions and their risk management solutions allows for a more powerful end-to-end experience that brings two of the best together,” Castagna said. “We’re thrilled to have Allied as part of our marketplace of connected services for our mutual customers.”
The new year began with major developments in the F&I space.
APCO Holdings, a leading provider and administrator of automotive F&I products and home to the EasyCare and GWC Warranty brands, announced it has acquired National Auto Care (NAC) through a deal finalized on Tuesday.
According to a news release, Scot Eisenfelder stepped down from his role as CEO of APCO Holdings effective with the closing.
“Scot added immense value to this organization during his tenure. We thank Scot for his dedicated leadership and the progress made in this very challenging market,” said Finbarr O’Neill, Executive Chairman of APCO Holdings.
The announcement also indicated Tony Wanderon, formerly CEO of National Auto Care now is CEO of the new combined company.
“We look forward to Tony’s leadership, leveraging his deep experience in the F&I arena, his demonstrated history of building strong businesses to successfully support auto retail F&I operations, while creating a strong customer-oriented culture,” O’Neill said.
O’Neill elaborated about what the combined resources of APCO and NAC could do for dealerships and the F&I industry.
“We are excited by all the benefits that this acquisition brings to APCO. It completes our national footprint, expands our range of products for automobile and RV dealers, adds new segments like powersports, and strengthens our training and business development capabilities to keep us at the forefront of helping dealers, agents and partners maintain F&I profitability as the market returns to a more traditional, competitive state,” O’Neill said.
The companies said their shared expertise and complementary offerings will be leveraged to help dealers meet changing market needs, such as the continued emergence of digital retailing and EV sales. APCO and National Auto Care insisted their expansive, combined F&I product suite will allow dealers to capture more revenue through increased sales opportunities, including additional EV offerings, high-mileage products, access to the MotorTrend Certified program and expertise in both RV and powersports industries.
With more than 35 years in business, NAC already provided products and services to thousands of auto, RV, and powersports dealers, credit unions and financial institutions.
“Our teams share many similar philosophies in how our companies operate,” Wanderon said. “We are all committed to quality and excellence in everything we do, most importantly taking care of customers, helping them optimize their dealer F&I operations while creating a workplace where our employees feel valued. I am confident that our future is bright.”
Through another news release, Lovell Minnick Partners (LMP) shared its perspectives about the development that marked the completion of a successful partnership between the private equity firm focused on investments in financial services, financial technology and related business services and NAC that began just over four years ago.
Over the past four years in partnership with LMP, NAC had rapidly expanded its business through a combination of organic growth initiatives and strategic acquisitions.
Since 2020, NAC completed 21 acquisitions, further diversifying the company into new product lines, geographies, and service offerings. The acquisitions were part of the company’s strategic plan to develop a vertically integrated business model, with administration and direct distribution capabilities that allow it to act as a “one-stop-shop” for its dealership and financial partners.
“The resources and support that LMP has provided over the last four years have been instrumental in helping us achieve an ambitious set of growth objectives and differentiate ourselves in a competitive market,” Wanderon said in the other news release from LMP. “We are confident that by combining the platform we built with LMP with the deep experience and expertise of APCO, we will create the leading F&I platform in the industry.”
Trevor Rich is a partner at LMP.
“We have had a terrific partnership with Tony, Courtney, and the entire NAC team, and we are proud of the growth rate NAC was able to achieve to differentiate itself in a crowded market,” Rich said. “Completing 21 acquisitions since 2020 was no small feat and is a testament to the unique platform that the NAC team has built. NAC has become the acquirer of choice in the F&I market and the company’s growth story, coupled with its value prop, has attracted many F&I agents and administrators looking to find their next partner to accelerate growth.”
Courtney Hoffman served as senior vice president of mergers and acquisitions at NAC.
“We laid out a very ambitious growth plan from the beginning, knowing that we would need to invest heavily in the business to achieve our goals,” Hoffman said. “LMP supported us each step of the way, offering both expertise and resources to help us execute on the vision. As we move into the next chapter, we are excited to unite with APCO, which will enable us to achieve the next set of ambitious growth objectives.”
Piper Sandler & Co. and Schulte Roth & Zabel LLP advised LMP and NAC in connection with the transaction. Weil, Gotshal & Manges LLP advised APCO in connection with the transaction.
Last July, J.D. Power acquired Superior Integrated Solutions/Darwin Automotive to strengthen its F&I software analytics offerings for dealers and third-party partners.
On Thursday, J.D. Power further reinforced that business segment with another acquisition, adding Tail Light, a leading automotive software company.
Executives highlighted Tail Light’s F&I menu and reporting software is used by dealerships and insurance providers to streamline vehicle financing and service contract configuration and reporting.
According to a news release, the Tail Light F&I technology will be integrated into the J.D. Power Dealership Technologies division, which was formed following the acquisition of Superior Integrated Solutions Darwin Automotive.
“The pace of digital transformation in auto dealerships has been staggering, and the F&I department has been leading that charge with growing demand for digital menu solutions that clearly and consistently display financing details and special offers to consumers whether they are in the showroom or buying online,” said Phil Battista, president of dealership technologies at J.D. Power.
“Similarly, demand has grown for analytics and reporting solutions that allow dealers to optimize their F&I offerings. By augmenting our rapidly growing suite of dealer-focused F&I solutions with Tail Light’s F&I technology and resources, we are solidifying our role as an end-to-end data analytics and software solutions provider to all facets of the automobile industry,” Battista continued in the news release.
Tail Light’s F&I menu and reporting software business includes the Tail Light Showcase solution, which can support both showroom and digital sales with highly personalized, customer-focused tools to select vehicle financing and protection options.
The platform also includes analytics and reporting software that can allow dealerships to analyze their own F&I performance versus industry benchmarks to make adjustments and optimize their consumer offerings.
“Today’s F&I department is fundamentally different from even a few years ago,” Tail Light chief executive officer Matt Twyman said in the news release. “Dealerships have become sophisticated, data-driven enterprises that rely on real-time analytics, competitive benchmarking, and powerful software to deliver the optimal customer experience while maximizing profitability.
“We have been committed to driving the technology transformation with the industry’s best software and analytics,” Twyman went on to say.
F&I product providers Protective Asset Protection and AUL Corp. now are both part of Protective Life Corporation, a wholly owned U.S. subsidiary of Dai-ichi Life Holdings.
The transaction, which was announced on March 21, closed on Monday.
“Growth through acquisitions continues to be an important part of Protective’s success story; however, it’s important for us to find the right companies for our business model and culture,” Protective president and chief executive officer of Rich Bielen said in a news release.
“AUL’s shared values, reputation for great customer and dealer service, and commitment to serving the community made it an excellent fit. I could not be more proud to have this team as part of Protective’s Asset Protection Division,” Bielen continued.
Protective Asset Protection’s offerings include extended service contracts, guaranteed asset protection and ancillary products to protect consumers’ investments in automobiles, recreational vehicles, watercraft and powersports vehicles.
In addition, Protective Asset Protection offers a portfolio of dealer participation programs, training and technology solutions through a network of general agents as well as a direct sales force.
Founded in 1990, AUL also offers a variety of finance and insurance products including warranties, vehicle service contracts, guaranteed asset protection insurance and a suite of ancillary products.
“AUL’s reputation as an industry leader in the high-mileage car space was built by a talented team that we are excited to welcome as part of the Protective family,” said Scott Karchunas, president of Protective Asset Protection. “We look forward to becoming an even stronger organization by leveraging the experience and strengths of both companies and teams under the Protective brand.”
This transaction represents Protective’s 59th acquisition and its sixth acquisition completed since Protective became part of Dai-ichi in 2015.
In this transaction, Maynard, Cooper & Gale, P.C. acted as external legal counsel for Protective, and Patterson Belknap Webb & Tyler LLP represented AUL. Houlihan Lokey acted as financial advisor to AUL in the transaction.
TransUnion wrapped up the workweek by announcing on Friday that it has completed the acquisition of Verisk Financial Services, the financial services business unit of Verisk, for $515 million.
The credit bureau first revealed it was making this move in February.
TransUnion highlighted that leading financial institutions, payment providers and retailers worldwide rely on Verisk Financial for a variety of data, insights and analytics — in addition to advisory services — to gain a clear perspective on where their businesses stand today and how to best position themselves for future success.
Verisk Financial’s leading business — Argus Information & Advisory Services — provides proprietary competitive portfolio performance insights sourced from a consortium of financial institutions, complementing TransUnion’s ability to help participating customers understand consumer behavior through a “full wallet view.”
Verisk Financial brings to TransUnion authoritative data sets for credit and debit card accounts and demand deposit account behavior, strengthening the company’s position as a leading provider of innovative solutions around the globe.
TransUnion president and chief executive officer Chris Cartwright said through a news release, “We’re thrilled to officially welcome Verisk Financial and look forward to a smooth integration process.
“Providing efficient online solutions for the financial needs of today’s digital-savvy consumer is critical, and the combined capabilities of TransUnion and Verisk Financial will help our customers by allowing them to make better and faster decisions,” Cartwright continued.
PJT Partners acted as lead financial advisor to TransUnion and Simpson Thacher & Bartlett served as legal advisor to TransUnion.
In the news release, TransUnion added, “We expect the combined company will better serve consortium members by providing enhanced insights and solutions to help them increase financial inclusion, acquire new accounts, and improve fraud prevention, risk management and targeting.”
National Auto Care (NAC) not only is growing its geographical footprint via acquisitions, the provider of F&I products, administration, consulting services, training and marketing support to independent agents, insurance companies, financial institutions, third-party administrators and credit unions for more than 35 years is broadening its market reach, too.
On Tuesday, NAC announced it has acquired the assets of Frost Financial Services, representing the first acquisition NAC has completed with a business focused on distributing F&I products through the credit union, community bank and other financial services institutions market.
Founded in 1972, Frost grew to be one of the largest independent GAP administrators in the credit union market prior to this transaction. The company works with hundreds of credit unions, community banks and other institutions nationwide, providing GAP, vehicle service contracts, collateral protection, payment protection and more.
Frost also has an exclusive sales and service platform, VisualGAP, allowing its clients to select the best products for its borrowers.
According to a news release, principals Jim Tenhundfeld and Phil Markwell will continue to lead the operation from the Frost office in Cincinnati, with the added support of NAC’s programs and claims management capabilities.
By combining with NAC, senior vice president of mergers and acquisitions Courtney Hoffman said Frost’s growth will be further accelerated through offering a wider array of value-added products, services and technology to its existing and new finance company relationships.
“I have personally known the team at Frost for many years and have always respected the company they have built as well as their commitment to putting their customers at the forefront of all they do,” Hoffman said in the news release.
“We are excited to have such a strong leadership team and talented employees join the National Auto Care Family. This acquisition allows us to continue and expand our commitment to the financial institution market,” Hoffman continued.
Executives added that Frost maintains its commitment to “old fashioned” personal service as well as its drive to offer the best products in the marketplace. Paired with Frost’s cutting-edge technology, executive mentioned the company was a “natural fit” for the NAC family.
“As we celebrate our 50th year in business, we believe the partnership with NAC positions us well for the next 50 years,” Tenhundfeld said. “Frost has evolved quite a bit since its beginnings in 1972, providing credit insurance to Ohio credit unions.
“We are excited to join NAC in this next chapter as we partner to continue our track record of growth and our focus on providing quality auto protection products and services to financial institutions,” Tenhundfeld went on to say.
NAC now has completed a dozen acquisitions in less than two years.
It’s getting difficult to keep a running count of how many automotive mergers and acquisitions there have been in recent months.
Another one in the F&I world surfaced on Monday, as Protective Life Corp., a wholly owned U.S. subsidiary of Dai-ichi Life Holdings, announced that its principal subsidiary, Protective Life Insurance Co., has entered into an agreement to acquire F&I provider AUL Corp.
While subject to the receipt of regulatory approvals and satisfaction of customary closing conditions, the companies said the closing of the acquisition is expected to occur in the second quarter.
“With a national footprint of agents and dealers, an experienced team in the vehicle service contract business in addition to distribution channel growth opportunities in the higher-mileage and the financial institutions space, AUL’s product portfolio is a strong complement to Protective’s Asset Protection Division,” Protective president and chief executive officer said Rich Bielen said in a news release.
“Our Asset Protection Division has grown steadily over recent years through both acquisitions and organic growth. It continues to be a very important part of our business, and we look forward to continuing the momentum with the acquisition of AUL,” Bielen continued.
Protective Asset Protection’s offerings include, among others, extended service contracts, guaranteed asset protection and ancillary products to protect consumers’ investments in automobiles, recreational vehicles, watercraft and powersports vehicles.
In addition, Protective Asset Protection, which has served customers for 60 years, offers a robust portfolio of dealer participation programs, training and technology solutions through a network of general agents as well as a direct sales force.
Founded in 1990, AUL, a pioneer in the used-vehicle service contract industry, also offers a variety of F&I products including warranties, vehicle service contracts, guaranteed asset protection insurance and a suite of ancillary products.
“AUL is excited about the opportunity to join the Protective family. Combining Protective’s resources and reach with our rapidly growing platform will enable us to provide more robust solutions for our agents and dealers,” AUL president and CEO Jimmy Atkinson said in the news release. “Protective and AUL also align in our focus on culture and opportunities for our employees, contributions to our communities and award-winning customer service. We’re excited to move forward together.”
When closed, this transaction will represent Protective’s 59th acquisition. It will be the sixth transaction completed since Protective became part of Dai-ichi Holdings in 2015.
Dai-ichi, a global leader with over $588 billion in total assets, considers Protective to be its North American platform and continues to aim for further expansion in the region, through both acquisitions and organic growth.
“AUL is an established industry leader in the automotive finance and insurance space, offering a full suite of products and services for agents and their dealers,” said Scott Karchunas, president of Protective Asset Protection. “Through this acquisition, we are excited to continue growing Protective Asset Protection by serving the needs of more agents, dealers and consumers across the country.”
Maynard, Cooper & Gale acted as external legal counsel for Protective in this transaction.
Patterson Belknap Webb & Tyler acted as external legal counsel for AUL in this transaction. Houlihan Lokey acted as financial advisor to AUL in the transaction.
The acquisition train just keeps gaining steam throughout the automotive industry.
The latest momentum builder arrived on Tuesday when TransUnion said it has signed a definitive agreement to acquire Verisk Financial Services, the financial services business unit of Verisk, in a $515 million deal.
TransUnion highlighted that Verisk Financial is relied upon by leading financial institutions, payments providers and retailers worldwide for competitive studies, predictive analytics, models and advisory services to provide a clear perspective on where their business stands today — and how to best position them for success in the future.
According to a news release, TransUnion has agreed to acquire Verisk Financial for $515 million, which will be funded with cash on hand.
Officials said the transaction is expected to close in the second quarter and is subject to the satisfaction of customary closing conditions and regulatory approvals.
TransUnion noted that Verisk Financial’s leading business — Argus Information & Advisory Services — provides proprietary competitive portfolio performance insights sourced from a consortium of financial institutions, which complements TransUnion’s ability to help participating customers understand consumer behavior through a “full wallet view.”
Around the core Argus business, Verisk Financial has added capabilities to address merchant fraud, regulatory compliance and consumer bankruptcy for financial institutions around the world.
In 2021, Verisk Financial generated $143 million of revenue and $41 million of adjusted EBITDA before corporate allocations and one-time discrete costs, or 29% margin. Verisk Financial is expected to grow revenue low-single-digits in 2022, which TransUnion expects to accelerate to high-single-digits in 2023 and into the low-double-digits in 2024 as part of the combined company.
TransUnion also expects to achieve an adjusted EBITDA margin of approximately 40% by 2026. Verisk Financial is expected to be immediately accretive to 2022 adjusted EPS upon closing.
“Verisk Financial is a distinctive business with authoritative, differentiated data — particularly from Argus’s consortium of lender-contributed data and analytics. TransUnion’s broad range of data, analytics and technology enhances Verisk Financial’s existing data set and expands their addressable market while delivering valuable innovation to members of the consortium,” TransUnion president and chief executive officer Chris Cartwright said in the news release.
With the acquisition of Verisk Financial, TransUnion explained that it intends to provide enhanced insights and solutions to help consortium members increase financial inclusion, acquire new accounts, and improve fraud prevention, risk management and targeting through better application of solutions like CreditVision and CreditVision Link.
TransUnion also mentioned that it plans to accelerate the modernization of delivery of Verisk Financial’s products by leveraging the technology of its PRAMA Analytics Platform.
“As consumers continue to digitize their financial behaviors, the addition of Verisk Financial will augment our existing data and analytics capabilities, deepening customer partnerships and complementing our insights and benchmarking solutions,” said Steve Chaouki, president of U.S. Markets and Consumer Interactive at TransUnion.
“Together, our enhanced capabilities will help our respective customers accelerate their growth by allowing them to make better — and faster — decisions driven by a holistic ‘full wallet view’ of how consumers are using their accounts,” Chaouki continued.
Following TransUnion’s acquisitions of Neustar and Sontiq, and the sale of TransUnion’s healthcare business, the credit bureau pointed out that the acquisition of Verisk Financial strengthens the company’s position as a leading provider of innovative solutions to businesses around the globe.
TransUnion said this acquisition will provide it with authoritative data sets for credit and debit card accounts and demand deposit account behavior and will enhance the company’s ability to scale current offerings and ultimately enable consortium members to make more informed decisions that better serve consumers.
“Today’s consumer requires unique, tailored solutions across a range of financial needs,” said Lisa Bonalle-Hannan, president of Verisk Financial. “TransUnion is a respected industry leader, and the combined assets of each company will only improve the way we serve customers.
“Further, the acquisition elevates TransUnion as an advisor helping financial institutions serve the ever-changing consumer landscape,” Bonalle-Hannan went on to say.
Verisk Financial is headquartered in White Plains, N.Y., serving clients in more than 40 markets around the world. Officials added that the Argus business — a long-standing strategic partner of TransUnion — represents approximately 65% of Verisk Financial revenue and is home to the core data asset.
