This article has been updated since its original 7/14 publication to clarify the transaction is a merger, not an acquisition.
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Social media was abuzz yesterday with rumors of a big-ticket transaction, of Chicago-based Crash Champions acquiring the Dallas-based Service King Collision. A July 14 news release from Crash Champions confirmed a merger was occurring, along with providing other details: After the transaction is complete, Crash Champions will grow to 550 locations in 35 states and Washington, D.C., and will all operate under the Crash Champions name and banner.
The deal was enabled through an investment from Clearlake Capital Group, L.P., which the release said would be "simultaneously executed" with the "strategic transaction with Service King Collision." According to the release, "Crash Champions' management team and operating partners, alongside Clearlake, will lead the combined Company going forward." Terms of the transaction, subject to customary closing conditions, including regulatory clearances, were not disclosed in the release.
Founded in 1999 by CEO Matt Ebert in a single storefront in Chicago, Crash Champions had until the merger operated 200 collision repair facilities in 20 states, while Service King, founded in 1976, had expanded to over 330 locations in 24 states.
"Today, Service King offers deep footprint coverage in many of the nation's fastest growing MSAs, including Atlanta, Austin, Dallas, Houston, Las Vegas, Nashville, Phoenix, Salt Lake City, San Antonio, Seattle, and Washington, D.C. Partnering with Crash Champions will allow Service King to better serve its customers and carrier partners, while driving long-term value for employees, vendors, and investors," the release continued.
Ebert called the deal "another milestone" in the company's "growth story."
"This strategic combination further enhances our ability to serve our customers and insurance partners while creating advancement opportunities for our team members across both organizations."
Clearlake had previously provided a capital infusion and debt recapitalization of Service King. As part of the transaction, the investment firm will provide growth capital to Crash Champions, whose management team "will execute on the Company's go-forward strategy with Clearlake's support."
"This investment was driven by our thematic-based approach to investing in the automotive aftermarket and our specific identification of the collision repair sector as an ecosystem at a historical inflection point," said José E. Feliciano, co-founder and managing partner, and Colin Leonard, partner of Clearlake. "The proliferation of vehicle technology has put unique demands on the shop operators to invest in OEM certifications, equipment, and most importantly their personnel to deliver safe and efficient service. We are impressed by Matt and the Crash Champions leadership team and admire their commitment to customer service and re-investment in both their operations and talent. It is exciting to partner with them to create this differentiated national platform, and we look forward to utilizing our O.P.S. framework to unlock the inherent value of this combination and position the platform for continued strong growth."
The combined company's total workforce will exceed 9,200 team members, the release noted, and both companies have "highly complementary geographic footprints with limited overlap." Both Crash Champions and Service King "will continue operating at all service centers nationwide without interruption during the post-closing integration activities."
"We remain committed to the operator-first mindset that has guided us throughout our history. This approach has enabled us to successfully integrate hundreds of shops and thousands of employees into one of the leading employers in the collision repair industry. As we welcome Service King's customers and skilled team members into our family, we will continue this tradition and earn their trust every day," concluded Ebert.
