Open Road Capital & Bain Capital Credit partner with sights on dealership investment



This week, Open Road Capital and Bain Capital Credit announced the formation of a strategic partnership to make long-term equity investments in automobile, heavy truck, recreational vehicle and heavy equipment dealerships and other transportation companies, especially operations that have been in family hands for decades.

And these firms already made their first move by making an investment in a Mississippi dealership group.

The first investment is in Herrin-Gear Autoplex, a family owned and operated dealership group. Founded in 1968 by Carl Herrin and George Gear, the Herrin-Gear portfolio includes BMW, Chevrolet, Infiniti and Lexus dealerships in Jackson, Miss.

The business has remained family operated under the leadership of Jack Herrin since 1998. According to a news release, management will continue operations consistent with those that propelled the dealerships to among the top performers in the region.

As part of the transaction, the firm said general manager Reed Howell has been elevated to president of Herrin-Gear and has acquired an equity stake in the business.

“This transaction reflects a major milestone for our family and for our business. Partnering with Open Road Capital will allow Herrin-Gear to pursue new opportunities while maintaining the legacy and culture built over the past 50 years,” said Herrin, who will maintain an equity stake and continue to serve on the company’s board of directors.

“Open Road Capital’s deep industry knowledge and expertise, along with their familiarity with our business, makes them the ideal strategic partner for our team as they seek to take Herrin-Gear to the next level,” Herrin continued.

As Open Road Capital and Bain Capital Credit forge ahead, InterPrivate, a family office backed investment firm, also is expected to offer additional long-term capital to the platform for certain future opportunities.

The firms said the platform launches with the objective of building a substantial portfolio of distinct investments in partnership with top-performing operators throughout the country.

They continued by noting the primary mission of the platform is to partner with high-performing dealer groups nationwide by providing equity capital in support of family member and business partner ownership transitions, recapitalizations and estate planning, growth and acquisition opportunities, or a combination.

Open Road Capital said it also will purchase dealerships outright from dealers seeking a complete exit, including dealers who would like to see their legacy continue through sales involving their current general managers or group of managers.

The firms explained each investment will be made in partnership with a dealer/operator, and the stores of each dealer/operator will reside within a separate partnership and operate independently from other platform investments. The firms said this approach preserves the entrepreneurial spirit that drives great operators, augmented by capital and other support that accelerate growth and scale in today’s competitive environment.

“We are excited to partner with the extended Herrin family, Reed Howell, and the quality management team assembled at Herrin-Gear,” said Eric Chelline, partner at Open Road Capital. “This proven team has generated strong results through multiple economic cycles, and we look forward to providing the resources and latitude to support their continued success.

Open Road Capital Partner Tim Batchelor expressed appreciation for the firm’s continuing and expanding relationship with Herrin-Gear’s manufacturer/distributor partners, noting, “Along with dealers, manufacturers and distributors are Open Road Capital’s most important partners, and we look forward to helping them achieve their network objectives by providing financial support to top performing dealership operators who otherwise might not have the resources to achieve their goals.”

Bain Capital Credit managing director Olof Bergqvist shared his perspective on the partnership.

“Over the last few years, we have built a close relationship with Open Road Capital, and we share a strategic vision of the constructive role our partnership can play in unlocking opportunities in this evolving industry,” Bergqvist said.

Fellow Bain Capital Credit managing director Matt Evans added, “We look forward to a productive partnership with Open Road Capital as we seek to provide creative solutions to address the various challenges and opportunities facing auto dealership owners throughout the country.”

Pinnacle Mergers & Acquisitions president Mike Sims served as the financial advisor and Brunini Law Firm served as legal counsel to Herrin-Gear.

Holland & Knight LLP and Kirkland & Ellis LLP served as legal counsel to Open Road and Bain Capital.

Source : AutoFinanceNews