Carmel-based J.D. Byrider, the largest used-car franchisor in the nation, has been acquired by a San Francisco-area private-equity firm, the company announced Tuesday afternoon.
Terms of the deal with Altamont Capital Partners were not disclosed.
J.D. Byrider, incorporated as Byrider Franchising Inc., consists of 127 franchised and company-owned dealerships in 27 states. The company has annual corporate revenue of about $175 million and systemwide sales of $740 million. It has 562 corporate employees, including 313 in Indiana.
Byrider's sales have remained flat during the economic downturn, and Altamont’s purchase gives Byrider access to the cash it needs to grow, said Steven E. Wedding, who has been named CEO as part of the deal.
Wedding, former president of franchising, replaces James. F. DeVoe Jr. as company leader. DeVoe will remain involved as a board director and as a consultant. The company's headquarters will remain in Carmel, Wedding said.
DeVoe became CEO in 2006 after his father, James F. DeVoe, who founded the company in 1989, died at the age of 62 in a small-plane crash in Melbourne, Fla.
The senior DeVoe’s death had no influence on the decision to sell the company, Wedding said.
“We needed that capital; that was the missing ingredient,” he said. “It was not a result of Jim DeVoe’s passing.”
Plans call for Byrider this year to open two company-owned dealerships and 17 franchised locations, giving the company a total of 146 stores, 131 of which would be franchise-operated.
The dealership typically sells cars by charging higher-than-average interest rates on loans to compensate for riskier clientele. The number of consumers struggling with damaged credit continues to climb the longer the economy falters, presenting additional opportunities for Byrider, Chief Financial Officer Bill Brunner said.
“We believe this is an optimal time [to grow], because there are increasingly more customers who are in this phase of challenged credit,” Brunner said. “Therefore, we feel the prudent way to go is to grow at a moderate pace.”
Byrider has three dealerships in the Indianapolis area—on West 38th Street, North Shadeland Avenue and on U.S. 31 South in Greenwood. Overall, it has 13 locations in Indiana.
Byrider began exploring an acquisition in 2008. Plans became serious about 18 months ago.
Altamont quickly separated itself from other potential bidders, Wedding said.
“When we went out to look for partners, we were looking for a partner who absolutely understood our model,” Wedding said. “And that’s what Altamont is about, investing in management and companies, not come in and try to re-engineer it into another direction.”
Andrea L. DeVoe, who has chaired the company since her husband’s death, said she supports the sale of the company.
“We are pleased to be putting the company in the hands of an outstanding management team and new owners who will expand on Jim’s original vision for Byrider and provide career-advancement opportunities for our employees,” she said in a written statement.
Altamont is private-equity firm founded last year by industry veterans from Golden Gate Capital that plans to concentrate on acquisitions between $10 million and $75 million. The Palo Alto-based firm closed its first fund in January with $500 million in capital.