Cliff Banks - The Banks Report

J.D. Power Goes Global as PE Backer Thoma Bravo Seeks Possible Exit

March 12, 2024 — As J.D. Power was completing the acquisition of the European-based Autovista Group a few weeks ago, Bloomberg reported that the data analytics and consumer intelligence firm was on the market itself for approximately $8 billion.

The $8 billion number might raise some eyebrows, but it is right in the neighborhood of what the price the company will command. Brookfield Business Partners paid approximately $8.5 billion for CDK Global in 2022, the largest transaction in the auto retail sector in history. 

If a deal for J.D. Power happens, it will be the second-largest transaction. 

Leading private equity firm Thoma Bravo acquired J.D. Power in 2019 from a Chinese firm for about $1.9 billion. It merged it with Autodata Solutions, another data firm it had bought a few months earlier.  

Since then, with Thoma Bravo’s backing, J.D. Power leadership, President and CEO Dave Habiger and Chief Strategy Officer Pete Cimmet, have built a powerhouse has acquiring nine companies, taking its overall revenue from $300 million in 2019 to approximately $900 million today. 

  • Trilogy Automotive – 2020
  • Inventory Command Center (ICC) – 2020
  • ALG – 2020
  • EpiAnalytics – 2021
  • Superior Integrated Systems (Darwin) – 2021
  • We Predict – 2022
  • Tail Light – 2022
  • ZappyRide – 2023
  • Autovista Group — 2024

The most recent acquisition, Autovista Group, gives J.D. Power a beachhead in Europe and a platform from which it can acquire other European companies. 

Potential Buyers

Finding a strategic buyer will be challenging because of the price tag and potential regulatory issues. 

Nevertheless, S&P Global is the most likely strategic buyer. In 2015, when McGraw Hill was selling J.D. Power, TBR wrote that IHS was a potential strategic buyer. We were right then, and we believe we are right today. 

IHS had acquired R.L. Polk in 2013. Markit merged with IHS in 2016, forming IHS Markit. In 2017, IHS Markit acquired Automotive Mastermind from JMI Equity and founder Marco Schnabl. 

And in 2022, S&P Global completed a $44 billion “merger” with IHS Markit. 

On the data side, J.D. Power provides numerous synergies. Furthermore, the companies do not compete much on the tech side, with many of their solutions complementing each other. 

Due to potential regulatory challenges, CDK Global, Reynolds and Reynolds, or Cox Automotive likely would be out of the running. 

Another possibility is Solera, which is backed by Vista Equity. But that play does not seem likely. Vista Equity will likely seek an exit for Solera at some point in the near future — even as soon as this year. 

The buyer will likely come from the P/E world. Thoma Bravo has built an attractive narrative — Power is now a global company with strong financials and the ability to keep growing via acquisition with a possible IPO in the future. 

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