In February, Jonathon Best, CEO of Better Collision Centers, came within “a few days” of saying yes to private equity, as others have done.
“We got pretty close on the last one,” Best said.
He said Better Collision Centers had lined up some three dozen acquisitions as part of the deal: “Thirty to 40 in the pipeline that could be taken down,” but he opted to keep the Southeast U.S.-focused MSO independent.
“The equity splits and the cost of the money” weren’t what he wanted.
Yet.
“They were upset, but they understood,” he said.
Better Collision’s potential to be a platform for follow-on buys remains attractive to private equity firms.
“People I’ve talked to, not many [collision repair] groups are set up for that,” he said. “We know our numbers, our plan, and we don’t want to disappear in the mix. We can always go back there.”
Moving into Georgia and North Carolina
With the foundation laid for its new Summerville site and its Rock Hill store open, Better Collision currently has 10 locations, all in South Carolina, open or in the works – just four years from the company’s founding.
Inside the new Rock Hill location.
Best said they’ll have 15 stores by year-end, in three states, adding Georgia and North Carolina.
“Three M&A targets … and two brownfields,” all outside South Carolina, Best said. “We’ll keep going until we can’t maintain the culture -- or can’t afford it.”
For now, it’s “adapting to the capital available, self-funded, bank debt, private lenders, pay bills, and resupply.” The team consensus is to take the private equity when it’s the best deal.
Best has done it before, building a regional MSO “from three to nine or 10 locations” -- where Better Collision is now.
Its current growth plan can accommodate 150 stores, including multi-unit acquisitions.
Young, Scrappy, Hungry
Better Collision is, as Hamilton sang of himself and his country on Broadway, “young, scrappy and hungry.”
Best calls it “opportunistic -- executing the path of agile.”
Evidence?
“We opened an EV location,” he said, “EVen Better Collision. A trial, to isolate EV, dabble in OE-certified at premium rates,” but it found too much friction and not enough specialization for developing a second brand.
“We don’t find the work to be that different,” Best said, apart from technology. So Better Collision started an EV team to deploy in markets where needed. The work still brings higher rates and is more bottom-line profitable.
The EV store will relocate as a Better Collision.
Better Collision also has four mobile ADAS calibration vehicles and a fifth on the way.
Summerville is set to open in September at 20,000 square feet, with “all our new stuff, white steel, sealed floors -- and HVAC,” speaking to the long, hot Southeast summers, which makes air conditioning a perk for techs.
Site of the upcoming Summerville location.
Summerville should benefit on the business side by being “right next to the Volvo plant, on an exit ramp,” and with a pending deal, via Better Collision’s insurance partners, to service Amazon delivery vehicles.
What about the name -- or rather, the names?
Jonathon Best is chief executive; the MSO is Better.
He laughs.
It flows from conversations involving the Christmas movie “Elf” and not wanting to be likened to the terrible java named “World’s Best Cup of Coffee” -- along with the question, “What could be better than best?”
And that was it exactly. Better is better.
“All our internal documents, training manuals, ask, ‘How do we make the experience better?’” Best said.
He said each location is in the top quartile of industry performance-per-unit metrics.
Keeping Private Equity ‘On Speed Dial’
The Summerville store will start with about a dozen workers and like other Better locations grow to between 14 and 20. The company overall is pushing 200 staffers.
On private equity, there have been other suitors. Others have come calling, left their cards and numbers.
“Consolidation is creating opportunity for people like us right now,” Best said.
“We’re active with private equity. We keep engaged, sharing data quarterly; they’re on speed dial,” he said.
“We look at PE as another bank,” he said. “Some bring value, some know things we don’t, and they can do a lot more. But we classify them as a badass bank.”
Paul Hughes