ADS Receives “Agency Growth Award” From Axiom

We are delighted to announce Advanced Dealer Solutions was presented the 2021 Agency Growth Award from Axiom Product Administration. We were able to spend some time working with part of the Axiom team learning about different product updates and going through processes. We also found ourselves taking some time to get to know each other a little better through friendly and competitive gaming.

August Newsletter

It is hard to believe we are already in the month of August! The recent heat waves across the country surely reminded everyone we are in the dog days of summer! Hopefully, everyone was able to find some comfort near a pool, lake or in the comfort of their air-conditioned home. 

ADS is excited to make a few big announcements… 

View our newsletter to see all the exciting things happening soon!

July Newsletter

This weekends celebration of America comes at a time when we may need to celebrate the birth of our independence and unity more so than in years past. 

The courage our Founding Fathers showed 246 years ago by forging ahead for what they believed in, as a better and more equal way for Americans to live and prosper, leaves us awestruck and inspired still to this day. Their courage and resilience continues to pay dividends for all of us fortunate enough to live in this amazing country. 

Although much has changed over the last quarter of a millennium in terms of technology, social norms, communication, etc., the core tenants and beliefs the Founding Fathers fought for are still relevant, alive and vibrant today. 

God Bless America!

We hope you all have a safe and enjoyable weekend!

To view our full newsletter

Gina Cocking interviewed by Ryan Nelson

Ryan Nelson interviewed Colonnade Advisors CEO and Managing Director Gina Cocking on Advanced Principles Podcast. Colonnade Advisor’s provided a summary of the first episode together to hit the highlights of the conversation.

This interview highlights the important role that Colonnade Advisors plays for their clients when they embark on the process of selling their company, raising capital, or seeking to acquire another company.

Colonnade Advisors has deep experience in the automotive dealership services industry. They publish Quarterly Updates on the Auto F&I sector with information on dealer profitability and recent transactions.

In this most recent interview, Gina and Ryan cover the following questions:

  • What makes Colonnade unique as an Investment Bank/Advisor? (6:00)
  • How Colonnade Advisors brings specific value to the transaction process (13:00)
  • What is the difference between a Private Equity firm and an Investment Bank? (15:00)
  • How the pandemic created shifts in the auto industry and auto-related M&A (20:00)

What makes Colonnade unique as an Investment Bank/Advisor? (6:00)

Their focus is on industry dynamics, business models, valuation metrics, accounting issues, and participants. They maintain a dialogue within their extensive network of owners, investors, and buyers in their target sectors.

Gina: Our focus goes back over decades. In the early 2000s, we worked with Mepco on its sale to Independent Bank. Mepco had two lines of business: 1) insurance premium finance and 2) vehicle service contract (VSC) finance. We worked closely with Mepco on both lines of business to create a successful outcome for their owners and team.

We became experts in the insurance premium finance industry and the leading advisor on transactions in this space. We are the leading investment bank in the United States in insurance premium finance. We’ve done 28 transactions in the insurance premium finance industry.

Through our work with the team at Mepco, we also got to know the vehicle service contract (VSC) space. After a decade of working with our clients at Mepco and Independent Bank, we assisted with the sale of Mepco’spayment processing business to Seabury Capital Group.

Eventually, that took us into the overall Auto F&I (Finance and Insurance) space where we’ve had the opportunity to work with direct marketers, agencies, and administrators. (Read more about the F&I ecosystem here).

We also work with finance companies in the automotive sector: subprime lenders, near-prime lenders. We closed a transaction last fall for OpenRoad Lending, a direct-to-consumer marketer of auto loan refinancing. 

We’ve been doing a lot in auto finance. This has taken us into data analytics, especially on the direct-to-consumer side. Direct-to-consumer marketing is all about data and data analytics. We have now worked with a number of data analytics companies and marketing companies associated with the automotive space.

How Colonnade Advisors brings specific value to the transaction process (13:00) 

Gina: We have pattern recognition, and we’re rarely surprised. 

Every transaction’s different. There’s always something new. When things are new and different, we have the skill set to navigate the situation.

What differentiates us from our competitors in this space is the tenure, institutional knowledge, and experience of our senior bankers.

At other Investment Banks, team members float through the different groups. They don’t stay long enough to develop industry and institutional knowledge. Their junior teams turn over. More importantly, they don’t have anything but transactional experience.

Clients, especially entrepreneurs or family-owned businesses, need more than just the transactional experience. They are looking for long-term relationships like we provide at Colonnade.

What is the difference between a Private Equity firm and an Investment Bank? (15:00)

Gina: The Private Equity (PE) firms have a pool of capital to invest in one or more companies. Their goal is to become the owner of a company. They’ll negotiate and buy a company so that the company is then part of their portfolio, which they’ll eventually sell and hope to make two to three times their money.

Most private equity folks have gone through investment banking at some point in their careers. What’s different about what they do is that they’re managing other people’s money. 

In investment banking, we are advisors on either the buy-side or the sell-side. Sometimes I’ve had people say, “Well, you’re kind of like a real estate agent.” My answer: “Not really.” There are business brokers that are more like real estate agents, however.

We are there to work with the (client) company side-by-side. If they’re selling, we help them prepare for the sale and go through the process. That includes getting to know the company so well that we can tell their story almost as well as they can. We help them to articulate their story: Where they have been, where they are today, and where they’re going. 

We then prepare written documentation, called a Confidential Information Memorandum (CIM). We identify the potential buyer universe. We contact those buyers. We negotiate with buyers. We answer all their questions. We deal with thousands of documents in the data room

We negotiate the terms of the transaction. We work closely with the attorneys on all the transaction documentation. We’ll provide our industry perspective and our business knowledge, but we’re not attorneys. We help get the deal to close. One of the important things is we keep the deal on task. It’s all about not letting people lose focus, keeping the deal going, and getting it to close.

In investment banking, we are paid a success fee upon the close of the transaction. Whereas a private equity firm is buying the company (and gets paid on the subsequent sale of the company after growing its value).

How the pandemic created shifts in the auto industry and auto-related M&A (20:00)

Gina: Everybody freaked out in the Spring of 2020. But we’ve worked with some visionary companies where we’ve been able to create some fantastic win-wins.

We had a deal that was supposed to close at the end of March 2020. The buyer put it on hold but worked with us to restructure the deal with an earnout. The transaction closed, the seller hit all their earnouts, and it was a fabulous deal for all.

Let’s talk specifically about the Auto F&I side: administrators and agencies. While everyone dipped in the spring of 2020, performance improved in the second half of the year, and then 2021 was a fantastic year. This was not as predicted, considering the supply chain issues. Fewer cars were being sold. 

Why the fantastic year?  The dealers are hyper-focused on making money when they can. The dealerships realized that F&I is uber important to the long-term profitability of the dealership. Dealers are selling more F&I products with every car. That has benefited the administrators.

Consumers have also had great experiences with these products. They’ve had claims paid out on their vehicle service contracts. They’re telling their family and neighbors, “It’s really a good product.” We have finally seen the maturity in the F&I industry that this is a peace of mind product. It’s not just a product that a dealership is trying to push onto a consumer; it’s a valuable product.

2022 has been a great year for Administrators. The dealerships are profitable, and they’re also getting better at selling products. We’ve started a new phase.

Colonnade Securities is a leading investment banking firm that has completed over $9 billion in M&A transactions for clients in the business and financial services industries. 

Advanced Dealer Solutions is a full-service, dealer development agency focused on automotive, RV, and powersports dealers across the United States. Please contact 844-320-3722 or for any inquiries.

November Newsletter

1/6th, that is all we have left of this wild year. Are you prepared to go into the final 6th more determined than you started? Can you and your team accelerate past the competition as mental and physical fatigue begin to set in? Can you put the finishing touches on the masterpiece of work you have been working on your whole career?

Advanced Dealer Solutions June Newsletter

In this month’s issue of The Advanced News, we highlight an organization that is combating Alzheimer’s disease, an exclusive program for your dealership, and the trick to cooking the perfect steak for Father’s Day.

Sales volume continues to be up, average prices are up, profits are up and we continue to celebrate our dealers’ successes with them each and every opportunity we can. We are all crossing our collective fingers for the manufactures to figure out the chip shortages so dealers can get much-needed shipments to their lots. 

We welcome any feedback and will seek to continually improve with each issue. It is through this ongoing experiment that we look to gain more knowledge, insight, and ideas that we will pass along to our current and future clients.

To read the full newsletter and subscribe follow the link below.

Advanced Dealer Solutions September Newsletter

This month’s newsletter features Warranty Forever which is the industry’s leading lifetime power train warranty program. There is information about the program and a testimonial on how the program benefited one of our dealer partners tremendously within the newsletter.

This month learn about our national sales director Cara Wilson, who is a true joy to get to know. There is a chance to get featured in future newsletters, to find out how you have to read through the newsletter.

We welcome any feedback and will seek to continually improve with each issue. It is through this ongoing experiment that we look to gain more knowledge, insight and ideas that we will pass along to our current and future clients.

To get subscribed and view our newsletter click the link below.