Truck, Jeep, Offroad, and Powersports Aftermarket Accessories Companies Wanted

Our client is a strategic buyer looking for acquisitions in the light duty truck, Jeep and UTV markets. The ideal acquisition company would design, manufacture, and distribute products in the truck bed accessories, bumpers, suspension, work truck, Overland, Powersports and Outdoor Enthusiast categories.

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Tidewater Fleet Supply / TNT Parts Announces Acquisition of D&J Supply, Inc.

ATLANTA – June 28, 2022 – TNT Parts is has announced that it has added D&J Supply, Inc. in Lithonia, Georgia to its team through an acquisition. As a family owned and operated business for over 45 years in east Atlanta, D&J brings a wealth of knowledge in the aftermarket heavy-duty truck parts industry combined with a talented team delivering exceptional customer service.

“We are thrilled to have a company of the quality of D&J join TNT Parts,” said Dale Herold, CEO of Tidewater Fleet Supply / TNT Parts. “Our continued goal is to be the customer’s first choice as the best provider for their heavy-duty truck and trailer and equipment parts needs. We are committed to exploring new ways to better serve our customers today and in the future. Partnering with D&J allows us to increase the number of customers we can reach and also positions us to take care of their other aftermarket parts needs.”

Jeff Schubach and Dan Schubach, Presidents of D&J Supply Inc. said, “we chose to join Tidewater Fleet Supply / TNT Parts because of their company culture. How they care for their employees and how they care for their customers was a perfect fit for us.”

D&J Supply joining TNT Parts brings together two highly rated, honest and reputable local companies who care, and are perfectly positioned to support the needs of truck fleets and individual operators and repair shops in the Atlanta metro area. Both companies are, and remain, a part of VIPAR Heavy Duty, North America’s leading network of independent aftermarket truck parts distributors.

The purchase of D&J Supply, Inc. by TNT Parts was facilitated by Hart Marx Advisors, the premier boutique consulting firm that assists buyers and sellers exclusively within the automotive and heavy-duty industries with mergers and acquisitions (M&A), divestitures and strategic planning. The financial terms of the purchase were not disclosed.

 


 

About Tidewater Fleet Supply & TNT Parts

Tidewater Fleet Supply (dba Tidewater Fleet Supply and TNT Parts) is a leading Southeastern independent wholesale distributor of heavy- and medium-duty aftermarket truck, trailer and equipment parts serving 4,000+ commercial and municipal customers through 14 locations across VA, GA, NC, SC, and FL.  The Company also services municipalities and government customers through dedicated facilities.  With an emphasis on customer service, extensive parts knowledge, training, and inventory, Tidewater Fleet Supply develops and supports deep relationships with its customers and suppliers.

Tidewater Fleet Supply www.tidewaterfleetsupply.com & TNT Parts www.tntpartsinc.com are a part of the Falcon Affiliates family of companies. For more information on Falcon Affiliates visit www.falconaffiliates.com.

 

Innovative Manufacturer of High-Performance Engineered Suspension Systems and Components

Premium products with 45% Gross Margin and 15% Adjusted EBITDA

The Company is a US based industry leader and pioneer of premium engineered suspension kits for muscle cars, collector cars, custom cars, and trucks through early 2000s. The Company offers the broadest range of suspension solutions for all popular performance aftermarket car models starting from the 1940’s. The Company has patent protection over its most innovative design.

The Company can fit seamlessly into a larger conglomerate of similar premium performance brands or remain a standalone business with strong ROI and a basis for acquisitions. Their customer is also purchasing brakes, wheels, engine, exhaust, and body components in both the restoration and high-performance markets.

 

Company Details:

  • Adjusted EBITDA of 15% ($1.25M)
  • Average Margin of 45%
  • Revenue increased 17% from 2019 to 2021
  • AS 9003S manufacturing floor
  • Engineering team with R&D Center
  • Product and industry innovator
  • Unmatched product integrity and performance
  • Industrial applications coming to market
  • Transparent reporting systems and culture
  • Integrated manufacturing and component supply
  • Strong experienced leadership team
  • Established 35+ year premium brand
  • Best in class customer support
  • Long employee, customer, and vendor retention

 

For more information, contact:

Chris Bovis
Partner
785-764-6248
CBovis@HartMarxAdvisors.com

Tim Wheeler
Partner
248-515-6344
TWheeler@HartMarxAdvisors.com

COVID and Cars: What Does the Data Say?

Long-Term Trends for the Light-Duty Automotive Aftermarket

The automotive aftermarket has a 50-year trend of growth and resiliency. Americans still utilize the automobile as the gateway to countless activities from the base necessities to luxuries like travel. The aftermarket broadly offers consumers greater choice and value in maintaining their vehicles, attributes that perform well in good and challenged economic conditions.

Parts and services sales rely on a couple of critical factors. Miles driven is the best predictor of parts replacement and service. Additionally, vehicle age is also an important driver as older vehicles result in more parts and service sales.

The long-term trend for the primary measurement of our economy…Gross Domestic Product (GPD)…has shown a steady growth for almost 50 years. The light duty automotive aftermarket is a very stable market with long-term positive trends similar to the GDP. Charts 2 and 3 below along with the supporting sets of data show these trends…even thru recessions and other major impacts to our economy.

The Covid-19 impact in 2020 is following a similar pattern of dip and recovery to previous recessions (see chart 1). Miles driven in January and February 2020 were each over 2% higher than in 2019. The impact of Covid-19 began in March. By April vehicle miles were 40% lower than in 2019. After April vehicle miles increased significantly and by September were only down 8.6% as compared to 2019.

Driving to and from work represents 30% of light vehicle miles driven. While the long-term viability of working from home for select occupations remains unknown, the short-term impact is largely offset by the automobile being viewed as safer than air or other public transportation. Other top automobile uses include other work-related travel, visiting friends and relatives and driving to school, daycare and church. (1)(2) As people have begun to resume their normal activities miles driven has increased and is projected to continue to increase in the future. (3)

In addition to the positive miles driven trend there are other consistent and positive trends for the light vehicle aftermarket:
• The average age of light vehicles has been increasing. As vehicles age, they need greater service and more replacement parts.
• The total number of light vehicles in use has steadily increased. More vehicles on the road results in a larger market for service and parts.

The two premier organizations representing the automotive industry…the Auto Care Association and the Automotive Aftermarket Suppliers Association (AASA)…show the light-duty automotive aftermarket is large and stable…currently about $300 billion in sales for parts and service…and is projected to continue growing in the future.

In summary, the light-duty automotive aftermarket is a very stable and highly predictable market. Short-term economic disruptions are overcome and sales return to a steady growth pattern.

(1) U.S. Department of Transportation (DOT), Federal Highway Administration (FHWA) (2019) Highway Statistics 2018 (details)
(2) Center for Sustainable Systems, University of Michigan 2019. Personal Transportation Factsheet Pub. No. CSS01-07
(3) Auto Care Association / Automotive Aftermarket Suppliers Association (AASA) Channel Forecast Model – Chart 6

Chart 1

Chart 2

Chart 3

Chart 4

Chart 5

Chart 6

Services Spotlight: Market Analysis

M&A research in the world of COVID-19

There are many factors and influences within the automotive aftermarket, including some that were unimagined until recently. Given the dynamic and unpredictable events of 2020, how can we determine the future of the automotive aftermarket?

For the purposes of market analysis, we use historic data from similar times in the past, blended with the unique changes in our current environment to get a perspective for the future of our industry. We have seen and recovered from slow-downs in the past and will do so again this time.

The light duty automotive aftermarket is a very stable market with long-term positive trends. Simply put, parts and services are sold when vehicles are used. After the Great Recession vehicle miles increased at about 1.3% per year (CAGR) from 2011-2019 and sales closely matched the mileage trend.

What was the Covid-19 impact? From early March 2020 to mid-April, miles driven dropped 57%. By May 1st mileage had started to increase but was still down 44%. (1)

The predominant mode of travel in the United States is by automobile and light truck, accounting for about 69% of passenger miles traveled in 2018. Driving to and from work represents 30% of light vehicle miles driven. Other top uses include work related travel, visiting friends and relatives and driving to school, daycare and church. (2)(3) Vehicle use obviously drives maintenance, parts consumption, and even collision and repair. As people have begun, although slowly to resume their normal activities, miles driven will continue to increase and the aftermarket will rebound.

The market is indeed dynamic. When large numbers of people stayed at home and did not drive, the miles driven dropped significantly. While more people have returned to their workplaces, the lingering work-from-home impact will likely affect the aftermarket to some degree. The variables that determine the durability of the work-from-home trend are complex and largely unknown at this point. At the time of writing, the impact of widespread home offices on productivity, morale, and profitability are not known.

The long-term work-from-home trend is also a study in human behavior. Densely populated cities, with often fewer miles driven per capita are seeing an exodus to the suburbs and less dense, and less expensive areas were cars are a necessity and mobility and pandemic restrictions are reduced. With no relevant data in our history, the viability of work-from-home and its widespread impact remains speculative.

There are always opportunities. Some companies are more aggressive in finding or making the opportunities necessary for profitable sales. Other companies may just be in the right place at the right time with their offering. In some cases, consolidation can be a savvy option to achieve profitability in a challenging market by reducing operating expenses, inventory, equipment, and facilities.

Like most business activity, M&A slowed in Q2 as investors evaluated their current holdings and developed short and long-term plans to move forward. Now, some investors are beginning to look for troubled businesses. Others are cautiously resuming searches for appropriate bolt-ons to current investments as well as strong platforms based on solid historic performance and future market potential.

M&A in the automotive aftermarket is moving forward. Activity and interest from investors and companies looking for opportunities that match their criteria is increasing. Investors believe in the long-term stability of our market and its long-term growth potential, backed by historic data and performance. Selecting the right opportunities is a key to success.

HMA’s extensive automotive market experience allows us to find the right opportunities for our clients, both buyers and sellers. We do extensive and transparent research rooted in our wide network of contacts and resources developed over decades in the industry. HMA delivers a significant level of detail in acquisition searches that are tailored to each client’s needs.

John Nodson
Vice President, Research
Hart Marx Advisors
jhnodson@hartmarxadvisors.com

(1) Source: Auto Care Association Factbook 2021, Jefferies Group, Arity, Municipal Open Data Portals, TomTom, GTCOM, AutoNavi
(2) U.S. Department of Transportation (DOT), Federal Highway Administration (FHWA) (2019) Highway Statistics 2018 (details)
(3) Center for Sustainable Systems, University of Michigan 2019. Personal Transportation Factsheet Pub. No. CSS01-07

M&A Lifecycle Phase 1, Pre-Deal Preparation

Before leaving on a journey it’s always useful to have a map to navigate your way from where you are to where you want to go. Hart Marx Advisors has identified five phases of the lifecycle of a merger, acquisition, or divestiture. Learn about Phase 1: Pre-Deal Preparation.

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The Partner’s Notebook: Tom Marx

The past 90 days have changed the M&A environment profoundly. Read our view of the changes, challenges, and opportunities as we apply the lessons of the last few months in an attempt to anticipate the next year of changes for the industry and our clients.

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HMA in Motorsports

Hart Marx Advisors is more than just the automotive experts, we are active participants. Learn about HMA’s involvement in the 2020 SCCA National Road Racing Championship.

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Understanding Multiples

What is a Multiple anyway?  It’s so common of a term that most people don’t step back and ask the fundamental questions, specifically what’s a Multiple and how is it determined?

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Essential Industry: Trucking

On March 18, the Federal Motor Carriers Safety Administration eased restrictions on truck drivers, allowing them to work longer hours if they are carrying certain critical items.  Find out just how vital the trucking industry is with these amazing statistics.

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Chris Bovis Joins Hart Marx Advisors as Partner

Chris Bovis, an expert in the performance, racing and automotive aftermarket industries, has joined Hart Marx Advisors. Bovis will apply his 20 years of client development, acquisitions and integration, and marketing expertise to his new role as a partner at the firm.

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Hart Marx Advisors and Marx Group Works with Shanghai-Based AMInsight Consulting to Educate Chinese Automotive Aftermarket Business Leaders

Tom Marx of Hart Marx Advisors, Marx Group, Shanghai’s AMInsight Consulting, and Dave Barbeau of Barbeau Consulting, met with Chinese aftermarket business leaders to educate and discuss the fundamentals of mergers and acquisitions within the U.S. automotive aftermarket.

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David Barbeau Rejoins Hart Marx Advisors

Barbeau was responsible for brand growth and increased penetration on a global level for both Tier 1 suppliers Delphi Technologies and TI Automotive. He also co-founded a successful automotive parts distribution company, which later became part of Advance Auto Parts.

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Highline Aftermarket Announces Acquisition of Levin’s Auto Supply

Highline Aftermarket announced that they have entered into an agreement to purchase the assets of Levin’s Auto Supply, LLC headquartered in Sacramento, CA. Levin’s is a leading supplier of automotive aftermarket products to retailers and automotive parts stores, serving customers along the west coast for over 90 years.

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Minority Ownership Investor

Looking for Minority Ownership Investment Opportunities In Automotive Aftermarket

We have a client interested in making a minority ownership investment in the aftermarket. They are looking for targets with a strong management team and a vision to triple sales in five years if they have the backing of a significant and dedicated investor for organic and inorganic growth.

Acquisition Target Profile

  • Interested in a 20-80% ownership position, $20 to $100 million in equity investment.
  • US or Canadian ownership.
  • $40 to $500 million in current sales with high EBITDA margins.
  • Strong management team – or an outside manager with a strong track record of success. Must have equity in the business or willing to buy into the business.
  • Focus on automotive aftermarket, no or very limited OE. Some sales in other markets are acceptable, such as agriculture, industrial, marine, etc.
  • Manufacturers preferred, US or Canada manufacturing locations.
  • If a distributor, MUST have a value-added component.
  • If retail – stores or online consumer sales – probably not interested unless a VERY compelling/unique business.
  • DIFM service businesses will be considered.
  • Recurrent sales, products that are used and reordered.
  • Diversified customer base, not dependent on a few very large customers.

For more information, contact Tom Marx at 415-462-1805 or email tmarx@hartmarxadvisors.com.

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