AutoNation, Inc. announced that it has entered into an agreement to acquire El Segundo-based RepairSmith, a mobile automotive repair and maintenance company, for $190 million.
“AutoNation has embarked on a strategy to be the nation’s most comprehensive provider of transportation solutions, meeting the mobility needs of today’s and tomorrow’s customer through a broad, connected range of products and services that are clearly focused on providing our customers and their households a comprehensive, unique suite of transportation solutions,” Mike Manley, AutoNation’s chief executive, said in a statement.
“Earlier this year, we added captive financing capabilities and initiated the development of mobility solutions to expand our customer offerings. RepairSmith is the next step in our plan.”
Joel Milne, chief executive of RepairSmith, said the company had set out to discover new financing options.
“We talked to a lot of investors, but we also targeted leading retailers in order to help us scale our business, because there’s a number of automotive retailers out there who work with a lot of customers, both in sales and service, and it’s just a natural fit,” he said.
“(AutoNation was) at the top of our list … From the beginning, it was just a natural fit between our service offerings and their retail sales and service. We probably first talked to them five to six months ago, and I think both sides fell in love with what we could do together.”
Manley continued to say in the release that the acquisition would improve AutoNation’s ability to penetrate the after-sales service market and respond to customer needs. According to the company, although roughly 80% of vehicles sold by AutoNation receive annual service at franchised dealerships during the first three years of ownership, the percentage falls off dramatically in subsequent years. RepairSmith will run as a subsidiary of AutoNation, and the management team is expected to remain the same.
The transaction is expected to close in the first quarter of next year, subject to customary closing conditions and regulatory approvals.
