Cliff Banks - The Banks Report

Auto Retail Tech M&A June 1st-9th

June 9, 2023 — June got off to a hot start with M&A in the auto retail sector with at least three transactions being announced this week (and two we know that have not been announced yet).

For the most part, the acquisitions were tuck-in deals providing the buyers with software that both expands their customer footprints while enhancing their solution offerings. 

The industry is still a few months (at least) away from seeing several large transactions as notable tech vendors wait for more a friendly environment to either exit or finance deals.  

Nevertheless, June’s early activity indicates that investors and companies are willing to spend money if value and synergies exist. 

DAS Technology Adds 3 Birds to Its Arsenal

Earlier this week, DAS Technology announced it acquired North Carolina-based 3 Birds Marketing, a CDXP™ technology firm providing SaaS-based marketing, analytics, and consumer engagement solutions.

The acquisition adds a non-overlapping customer base expanding DAS Technology’s network to more than 9,200 retailers along with multiple OEM relationships. 

It also enhances Das Technology’s AI and data mining capabilities while expanding advanced analytic data sets to target consumer engagement opportunities. 

Two of the firm’s co-founders, CEO Kristen Judd and Len Wohadlo, along with numerous other employees, are joining the DAS team. Operating in 16 countries, 3 Birds was launched in 2009. 

The transaction is DAS Technology’s ninth since its start in 2010. The company has been led by CEO Alexi Venneri since she co-founded the firm. 

(Full disclosure – AUTOVATE is an independently-run portfolio division of DAS Technology, which also includes Digital Air Strike,, LotVantage, and 3 Birds.)

Reynolds and Reynolds Purchases Startup AutoVision

Reynolds and Reynolds continues its aggressive acquisition strategy, adding AutoVision this week, its third purchase since January.  

Launched in 2020 by AJ McGowan, AutoVision claims its software enables its dealer customers to conduct precise used-vehicle appraisals using customizable and adaptive market pricing algorithms. 

According to the press release announcing the deal, AutoVision’s algorithms compare vehicles in real-time on an apples-to-apples basis using sophisticated language processing, with specific data sets that deliver accurate data for each dealership’s unique business model. The system’s automation compiles this data at the push of a button with no need to manually adjust fields.

Reynolds will integrate AutoVision into its Reynolds Retail Management System combining it with its ReconTRAC software to help dealers manage the lifecycle of the vehicle, from acquisition to reconditioning, inventory management, and merchandising.

The transaction follows the January purchase of American Guardian Warranty Services; leading a $9.25 capital raise of Sheeva.AI, a firm providing in-car payment and commerce solutions using a patented geolocation technology; and an April acquisition of Canadian-based DealerCorp Solutions.

StoneEagle Adds Pencilwrench

StoneEagle announced on Monday it has acquired service and repair documentation firm Pencilwrench.

StoneEagle is one of the industry’s leading F&I analytics and reporting platform. Adding Pencilwrench will help dealers better address OEM warranty and service claim contracts. 

“The addition of Pencilwrench allows us to multiply our impact to dealerships, third-party administration companies, and OEM partners by providing a platform that creates efficiencies throughout the entire claim adjudication journey,” said Cindy Allen, chief executive officer of StoneEagle.

According to the press release announcing the purchase, former technician turned general manager, Joe McCue, created PencilWrench in 2013 to decrease technicians’ administrative work so can focus on fixing vehicles in the service drive.

Existing StoneEagle investor Battery Ventures, a global, technology-focused investment firm, partnered with StoneEagle on the acquisition. Look for Battery Ventures to finance other StoneEagle acquisitions. Presidio Technology Partners advised Pencilwrench in the transaction.

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