Caliber Collision, ABRA to Merge
Dec. 4, 2018—Caliber Collision and ABRA have entered into an agreement to merge. The collision repair companies made their definitive merger agreement official on Wednesday morning in a joint press release; the news had been confirmed by multiple sources to FenderBender late Tuesday.
“Today we are excited to share the news that two leaders in our industry, Caliber Collision and Abra Auto Body Repair of America, are joining forces to create the collision repair provider with the broadest geographic coverage in the United States,” a memo, obtained by FenderBender and issued from Caliber and ABRA management to its employees on Tuesday, stated. “We are confident that this combination will transform the collision repair customer experience like never before, position us for additional growth, and open up new career growth opportunities for our valued teammates.”
On Wednesday, the companies officially announced their merger agreement by saying the merger will allow them to better serve their customers and insurance clients. The transaction, which, according to the companies is expected to close in early 2019, creates a collision repair supergiant with nearly 1,000 locations, and drastically changes the landscape of consolidation in the U.S. auto body industry.
ABRA, which in October completed an acquisition of 38-shop Cooks Collision, had 390 facilities in 28 states prior to being purchased by Caliber. Caliber acquired its 600th location in August, earlier this year.
Steve Grimshaw, Caliber's CEO, said in a press release that "with more than 1,000 stores in 37 states and the District of Columbia, we look forward to providing customers and insurance clients with the flexibility and convenience that come with the broadest geographic coverage in the United States and a full suite of services."
David Roberts, managing director at FOCUS Investment Banking, a firm that handles many of the industry's acquisitions, told FenderBender that the "two behemoths will merge into one $4 billion giant." Roberts, who was not involved in the merger, said that his understanding was that "Helman & Friedman, the private equity owner of ABRA, has agreed to buy 55 percent of Caliber Holdings with current investors, OMERS, Leonard Green and management continuing to hold the remainder of the new entity.
"Caliber's strategy is to continue to grow aggressively, and if you have 12 to 15 percent of the market share, which I believe they do, that gives them much more power than they had before."
Caliber brand's Grimshaw will lead the combined company. According to the companies' memo, all locations will remain open and “both companies will continue on their growth trajectories.” The company will operate under the Caliber brand.
"The combined entity is expected to continue opening brown and greenfields as well as continuing the aggressive acquisition schedules that both had embarked upon in 2018," Roberts said. And, in Wednesday's joint press release, it was noted that the combined company was created in an effort to offer customers more offerings, including dedicated non-drive, express, and aluminum-certified repair centers.
Changes will not occur for several months.
In Wednesday's statement, ABRA CEO Ann Fandozzi said: "Our industry becomes more complex every year. The combined company will invest in the equipment, training and technologies that will allow our teammates to build their careers while continuing to meet and exceed our customers' needs for years to come."
Tuesday's memo issued to Caliber and ABRA employees is below: