Originally posted on Automotive News
America’s Group CEO: More auctions to buy for better reach across U.S.
Auto auction services provider America’s Group wants more market share. It’s actively acquiring.
AMERICA’S GROUP
In April, America’s Group finalized the purchase of 44-acre San Antonio Auto Auction in Texas.
Wholesale auction services provider America’s Group is acquiring auction real estate with the goal of building out a coast-to-coast remarketing presence. This year alone, it has purchased four auctions. And it isn’t done yet. America’s Group, of Carmel, Ind., aims to purchase four to five more auctions this year, CEO Chuck Tapp told Automotive News. The company has sent out letters of intent — documents outlining preliminary terms of a proposed real estate sale — to possible acquisition targets.
The company is gauging the selling interest of both a handful of smaller auction chains and a few older, larger family auctions, Tapp said. Acquisitions of the latter take longer to work out.
“It’s a process,” Tapp said. “A family selling their business, which is what most of these are, is a big deal.”
In April, America’s Group finalized purchases of two auctions in Texas: 20-acre Corpus Christi Auto Auction and 44-acre San Antonio Auto Auction. It closed Aug. 1 on 18.5-acre Motley’s Richmond Auto Auction in Virginia and on Aug. 26 acquired 29-acre Z66 Auto Auction in Tulsa, Okla. Tapp declined to disclose purchase prices on the four auctions. Those acquisitions follow the company’s expansion in the West in 2023 when it purchased 17-acre DAA Las Vegas from McConkey Auction Group and renamed it America’s Auto Auction Las Vegas.
As of Sept. 18, the company had 42 auctions in 19 states. It also operates eight mobile auctions, Tapp said. The company will offer more than 1.5 million vehicles for sale in 2024, Tapp said. He did not share sold volumes and revenue figures, citing the company’s status as a private entity.
More capacity
Wholesale vehicle auction services provider America’s Group has purchased 4 auctions in 2024 so far. It intends to acquire more in the 4th quarter, company CEO Chuck Tapp said.
By acquiring auctions, America’s Group aims to further solidify itself as a known power player in the wholesale auctions landscape, Tapp said. The backing of a New York private equity firm has given it heft to do so in the last two and a half years.
In September 2021, Brightstar Capital Partners acquired the vehicle auction and remarketing company XLerate Group. Then, near the end of 2021, XLerate Group acquired another auction network: America’s Auto Auction. Combining the auctions into one network gave the company a national footprint and access to a larger customer base that the two auction chains alone did not have, Tapp said. For familiarity’s sake, the company rebranded its auctions under the America’s Group name. It is inclusive of the auction network as well as Axle Funding, which provides inventory financing to dealers, and Liquid Motors, which offers dealers Internet marketing solutions and other services.
“We went out in the second half of ’22 and started approaching the big banks” about acquiring other auctions, Tapp said. That’s “an easier conversation” to have with a national footprint and better shot at capturing market share, he said. America’s Group now conducts business with more than 30,000 dealers each week, Tapp said. Its buyer base has “largely” consisted of independent dealerships, but the company has seen more credit unions, fleet management companies and automakers’ captive finance arms running vehicles in its auction lanes in the last two years.
Roughly 7 percent of the company’s transactions are conducted virtually, Tapp said. The company also allows dealerships to sell a vehicle directly from their lot, he said. Still, Tapp said, the company feels dealers enjoy going in person to the auctions to buy vehicles.
“Our sweet spot is 5- to 12-year-old cars,” Tapp said. “That’s the way we started.” Dealer habits have certainly evolved. Vehicles generally hold up longer now than they did 15 years ago, Tapp said, and the company is starting to see four to five turns per vehicle. There are “very desirable 12-year-old cars in the world,” he said. To continue developing its buyer base, America’s Group will be more systematic: It will use geofencing and artificial intelligence to reach potential new dealer customers and those who buy fewer than 10 vehicles annually from the company’s auctions.
“We just need to be doing good things for them, and that’s what’s making us successful — along with the banks and things starting to understand that we’re here,” he said.