HGGC to invest in Dealer-FX

HGGC has agreed to make an undisclosed investment in Las Vegas and Toronto-based Dealer-FX, a provider of customer experience and process automation software for auto dealership service departments in the U.S. and Canada. Vaquero Capital LLC provided financial advice to Dealer-FX on the transaction while Evercore advised HGGC.

PRESS RELEASE

PALO ALTO, Calif.—July 29, 2015—HGGC, a leading middle market private equity firm, today announced that it has finalized a definitive agreement for a strategic growth investment in Dealer-FX, a market-leading provider of customer experience and process automation software for auto dealership service departments across the U.S. and Canada. Terms of the private transaction were not disclosed.

Las Vegas and Toronto-based Dealer-FX delivers a SaaS-based solution that spans the entire service experience including: on-line appointment scheduling, service check-in and write-up process, electronic technician dashboards, and predictive customer journey and workflow management analytics. The Company’s 1 Solution platform enhances the service experience by integrating and presenting vehicle telematics, OEM, DMS, owner’s manual and third-party vendor data in a customer-friendly mobile application.

“We are very excited to be partnering with HGGC,” said Gary Kalk, Founder and CEO of Dealer-FX. “Their resources and expertise in building technology businesses will be incredibly valuable as we continue to expand and develop new solutions that inject needed transparency into the car servicing process while helping automotive service departments evolve to meet the changing expectations of tech-savvy customers.”

Dealer-FX has more than 150 employees and serves OEMs in the Unites States, Puerto Rico, and Canada. The firm has experienced dramatic growth, doubling annual revenues over each of the past four years, and was ranked on Deloitte’s Technology Fast 500™ in 2014. In June 2015, the company was named Newcomer of the Year at the TU-Automotive (Telematics) conference.

“This is a great opportunity for HGGC to leverage our auto technology experience and follow our successful playbook of taking growing companies global,” said Steve Young, Managing Partner at HGGC. “Dealer-FX is a proven leader within an auto retail IT market that is expected to reach $16 billion by 2018, and we’re confident that they can capture greater market share in North America and continue to extend their footprint into international markets.”

“Inconsistent service advisor performance is one of the key forces driving customer distrust and defection, which is why fifty percent of dealers plan to adopt Service Lane Technology over the next 18 months,” said Jake Hodgman, principal with HGGC. “Dealer-FX helps service departments capture valuable data and leverage it to improve the customer experience, resulting in increased revenues, retention, and customer satisfaction.”

This growth investment will be HGGC’s fifth transaction of 2015, and the second in their automotive technology portfolio, having previously acquired AutoAlert Inc., a provider of cloud-based data and equity mining services to car dealerships.

Vaquero Capital LLC, a San Francisco boutique investment bank, acted as financial advisor to Dealer-FX. HGGC was advised by Evercore.

About HGGC HGGC is a leading middle-market private equity firm with over $2.4 billion in cumulative capital commitments. Based in Palo Alto, Calif., HGGC is distinguished by its “Advantaged Investing” model that enables the firm to source and acquire scalable businesses at attractive multiples through partnerships with management teams, founders and sponsors who reinvest in deals alongside HGGC, creating a strong alignment of interests. Over its history, HGGC has completed platform investments, add-on acquisitions, recapitalizations and liquidity events with an aggregate transaction value of more than $10 billion, representing more than 45 transactions. More information is available at www.hggc.com

About Dealer-FX Dealer-FX, the most trusted name in automotive customer experience and relationship management, is focused on helping dealer and OEM clients to Drive the Customer Experience by enhancing customer retention, mobile and data strategies. Their 1 Solution suite of service tools provides integrated software that delivers a sales to service transition, online scheduling, appointment ledger, route sheet, vehicle status board, seamless DMS integration, advisor and technician dashboards in addition to supporting vehicle telematics and diagnostic data integration. www.dealer-fx.com