Focus Advisors, an M&A advisory firm for the collision repair industry, released its annual review of growth and consolidation trends for 2024.
Produced by Madeleine Roberts Rich, senior associate with Focus Advisors, the report said 2024 posed some challenges for the collision repair industry, and single shops and MSOs alike were forced to adapt accordingly.
The Total Cost of Repair (TCOR) for vehicles rose by 3.7% to $4,667, according to CCC. At the same time, miles driven were up only 0.6% compared to 2019, and the industry faced a sharp drop in claims counts. Additionally, an increasing share of cars that did come into collision repair shops were totaled.
From dozens of conversations with owners nationally, as well as industry reports, Focus Advisors concluded there are several reasons for the slowdown: a mild winter, a reduction in claims counts, more uninsured motorists, election uncertainty, economic headwinds and margin pressure from insurers, among others.
It has not been uncommon for some operators to report their trailing 12-month sales were down as much as 20% to 30%. Gerber, the lone public collision repair company, reported in Q3 its same-store sales declined 3.5% year-over-year.
Despite the sales slowdown, consolidators and MSOs have continued to expand their footprints -- primarily through acquisitions, but some through real estate development as well. Private equity continues to pound on the door of collision repair, with some newcomers launching platforms toward the end of the year.
Their interest may have been bolstered by the rate cuts made by the Fed since September -- the first rate cut since 2020. The lowered cost of capital helped boost the global M&A market overall, with deal volume picking up by 8% from 2023’s 10- year low, according to Dealogic.
Focus Advisors said their research indicates more than 450 locations -- spanning MSOs and single shops -- were acquired by larger operators throughout the year.
“We hope these transactions provided satisfying exits for their former owners,” the firm said. “Regrettably, our firm also estimates that hundreds of single shops closed their doors this past year without an exit to a buyer.”
Capital Continued to Enter the Industry
Capital providers did not seem deterred by the industry’s bumpy road in 2024. Starting in November 2023, more than $9 billion of capital entered the industry, primarily through debt refinancings or recapitalizations of some of the largest operators. This infusion of capital spanned six major transactions, with several consolidators changing sponsors.
Private equity continues to be attracted to the collision repair industry for several reasons: the increased complexity of the car parc and a rising TCOR, significant economies of scale, specialization opportunities, resilience in times of economic hardship, and EBITDA multiple expansion.
Focus Advisors said more than 129 private equity firms have approached the firm in the last two years to express interest in launching a platform acquisition.
A significant change in 2024 was the openness of PE firms to move further downstream in the growth process, considering operations with just a few locations and modest EBITDA. Until early 2024, private equity firms would only consider partnering with owners of platforms that had five or more locations and $20+ million in revenue. However, they realized that such transactions were few and far between and faced intense competition.
As a result, they began approaching entrepreneurs of much more nascent platforms. This shift became evident in November when TRP Capital acquired a three-shop MSO in Long Island to launch a new platform called Driving Force. That same month, Envest Capital Partners acquired a one-shop operator, Authentic Auto Body, to launch a platform.
All of the consolidators listed above that have been backed by private equity capital now have deep pockets and mandates to grow their footprints at a rapid pace.
A New Private Equity Platform
As Focus Advisors was preparing to publish the report, it learned Trive Capital, a Dallas-based private equity firm, had just completed its acquisition of 20-location Chilton Auto Body in Northern California -- launching its platform with an estimated $65 million to $85 million in revenue in a single transaction, ahead of 2-year-old Brightpoint and just behind 2.5-year-old OpenRoad.
The Big Five Continue Their Growth Streak
The five largest collision repair operators -- Caliber, Gerber, Crash Champions, Classic Collision and Joe Hudson’s -- continued to add shops throughout the year. They also paid close attention to maintaining the performance of their existing shops to withstand some of the industry's headwinds. They collectively added 319 shops, representing a 9.1% increase.
Joe Hudson’s, historically focused on the Southeast of the U.S., moved northward. Caliber continued to build out its real estate development capabilities and expanded with several greenfield and brownfield projects. Crash Champions announced the launch of its Crash Luxe initiative, with an enhanced focus on EVs and luxury repairs.
Focus Advisors said its research shows the Big Five now have 3,836 shops, comprising north of $15.6 billion in annual revenue. This totals around 30% of the collision repair industry’s market share.
Joe Hudson’s and Classic Collision saw the most significant footprint growth, growing their store counts by 27% and 21% year-over-year, respectively, while entering several new states. In contrast, experiencing much more modest growth were Crash Champions (6%), Gerber (6.3%), and Caliber (7.6%).
Accelerators Continued to Accelerate
In addition to the Big Five, there are eight firms that have private equity backing and have continued to grow, referred to as “Accelerators,” comprised of the “Fully Launched” -- Quality Collision Group, CollisionRight, Kaizen Collision and VIVE Collision -- as well as the “Newly Launched” -- OpenRoad, Puget Collision and Brightpoint.
Cumulatively, these eight comprise more than $1.5 billion in annual revenue, or north of 3% of market share. Cumulatively, they added 80 shops throughout 2024, totaling 27% footprint growth. CollisionRight, now owned by Summit Partners and led by Rich Harrison, grew its footprint by 14 shops throughout the year.
Quality Collision, backed by Susquehanna Capital Partners and led by Jerod Guerin, acquired 19 shops. They had two highly noteworthy transactions throughout the year. They began 2024 by acquiring the (currently) nine-shop Utah platform Cascade Collision. And in November, they announced their acquisition of LaMettry’s, an 11-shop MSO in the Minneapolis area. This was the largest transaction of the year.
VIVE Collision, founded in 2022 by Vartan Jerian, had a highly successful recapitalization in 2024 when Greenbriar Equity acquired VIVE from Garnett Station. VIVE has focused on the Northeastern markets. They increased their footprint to 16 shops and now have 53.
It’s worth noting that VIVE now faces enhanced competition throughout the Northeast. Classic Collision entered Virginia and Maryland in 2024. CollisionRight made it a priority to grow north of its Maryland and Pennsylvania locations. Joe Hudson’s -- traditionally Southeast-focused -- moved northward into Washington, D.C., and Ohio. As previously mentioned, in November, two new platforms entered the fray: Driving Force Collision out of New York and Authentic Auto Body out of Massachusetts.
Kaizen Collision had faced some challenges and was acquired by Kinderhook in 2024. It has focused more on stabilizing and optimizing the performance of its existing store count, closing three of its locations as part of this effort.
Puget Collision was formed in 2022 by Joe Morella with the backing of Eagle Merchant Partners. Its focus has been on acquiring Driven Brands franchisees west of Colorado. It now has 53 locations in this geography, having added 22 locations throughout the year, expanding into new markets like Southern California and Colorado.
Rounding out the other newly launched platforms, Southworth-backed BrightPoint Auto Body hired Gerber executive Paul Williams at the end of 2023 to lead it, adding six new locations to its portfolio in 2024. LP First Capital and Trivest-owned OpenRoad grew with add-on acquisitions in Oklahoma and Arizona.
Accelerators Had the Year’s Largest Transactions
The private equity-backed Accelerators were at the top of the leaderboard for the year’s largest transactions. Quality Collision Group led the pack with its acquisition of LaMettry’s and Cascade Collision. VIVE bought the five-shop Quality Collision out of Pennsylvania, while OpenRoad acquired, at the very end of 2023, and expanded an Arizona-based brand called Allard Collision.
The Big Five were also involved in the largest transactions, but it seems like Caliber and Gerber have switched their focus to finding add-on or expansion opportunities in their existing markets.
Many Independents See Chance to Thrive
The collision repair industry -- even though it’s been consolidating -- continues to have a very robust ecosystem of regional, independent MSOs. These regional independents have not taken outside private equity capital and therefore are not obligated to acquire. However, many of the nation’s leading independents recognized the buying opportunities that emerged from the year’s challenges, and they’ve grown their footprints.
The nation’s 10 largest independent MSOs increased their collective footprint by 20 shops in 2024, and Focus Advisors estimates their revenue grew by 33%. Each of these independents has their own strategy for growth and for maintaining performance. Some have focused on high-barrier-to-entry markets and exclusive OEM certifications; others focus on load-leveling in rural markets and courting DRPs. Some are franchisees. Some offer complementary services such as ADAS, towing, heavy-duty truck or mechanical services.
“The big picture is that this industry is demanding more specialization and more capital; regional independents that adapt accordingly can grow,” the report said.
Other independent MSOs that had noteworthy growth throughout the year were Texas Collision Centers, Alioto’s Garage, Mander Collision and Glass, Body by Cochran, Number 1 Collision Group (Canadian), and Eustis Body Shops, to name just a few.
Not to be overlooked is the emergence of Tesla as a collision repair provider. Throughout 2024, Tesla's share of American car sales was approximately 4%. Many shops across the country have invested in Tesla certifications, while Tesla has also built its own company-owned collision repair centers. These tend to have much larger footprints than traditional single shops, sometimes operating multiple shifts. As of the time of writing this article, Tesla had built 51 company-owned repair shops nationally. It remains to be seen how this continues to evolve.
More Consolidation and Specialization Anticipated in 2025
Given the dynamics of 2024, Focus Advisors anticipates there will continue to be a significant amount of consolidation in the collision repair industry throughout 2025. The sheer amount of private equity capital that entered the industry in the last 15 months strongly supports this trend.
The firm anticipates that more new platforms will emerge as well, and that the opportunity to partner with private equity will continue to be available for ambitious entrepreneurs with only a handful of shops. While owners looking to exit may be impacted by lower trailing 12-month sales when they go to market, they will benefit from the fact that EBITDA multiples have remained steady.
However, Focus Advisors also anticipates that successful operators will pay very close attention to maintaining their existing performance and finding strategies to recover their sales. What was clear in 2024 is that the COVID and post-COVID days of double-digit labor rate increases, large amounts of WIP and 75% margins on ADAS sublet are no more. There is a return to normalcy, and a specialized strategy will be necessary to compete.
The goal is to consistently bring high-TCOR repairable cars into the workflow, and, as the saying goes, “there are multiple ways to skin a cat.”
