Robert Brockman, the mastermind behind the Universal Computer Systems Inc. buyout of Reynolds and Reynolds Co., plans to take a more hands-on role than he acknowledged when the two companies announced the deal.

Brockman, the 65-year-old founder and owner of UCS, issued a press release Tuesday, Oct. 24, that said he will be the new company's chairman.

Fin O'Neill, the 54-year-old CEO of Reynolds and Reynolds, was named the new company's vice chairman. He has been given a two-year contract.

UCS issued its press release the day after shareholders approved the $2.8 billion merger.

Originally, O'Neill was to have been the boss. After Houston-based UCS first announced plans Aug. 8 to acquire its much larger rival, Brockman said he would be an adviser.

That clearly is no longer the case. And it comes as a surprise to Reynolds employees in Dayton, Ohio, and to 10,000 dealerships that use Reynolds management software.

Reynolds is subsidiary

Brockman is the architect of the deal, which pays Reynolds stockholders $40 per share. The deal is valued at $2.8 billion.

Reynolds now is a wholly owned subsidiary of UCS but will retain the name Reynolds and Reynolds Co. It will sell both the UCS and Reynolds dealership management systems but only under the Reynolds brand name. The UCS system will be positioned as the premium system.

Reynolds and UCS issued releases last week after Reynolds shareholders approved the transaction. But only the UCS release named the chairman and vice chairman.

After the announcement, O'Neill told Automotive News he is comfortable with his new job and will help Brockman with a smooth transition. "I know this company well -- he doesn't," O'Neill said. "So I can help in the smooth transition. It's most important that the transition not disrupt in any way the support of our customers."

O'Neill said he will ensure that existing Reynolds customers are treated the same way today that they were before the deal. The new company's policies, procedures, products and services all will reflect a customer focus, he said.

When the merger was proposed, some dealers publicly criticized what they called inflexible UCS contract terms and heavy-handed sales practices. They fear UCS will impose its business practices on Reynolds.

One dealership group that had just signed a contract with Reynolds for its dealership management system quickly backed out of the transaction when it learned that UCS was buying Reynolds.

Another group is taking a wait-and-see approach.

"We're anxious to see what happens going forward," says Peter Hennessy, dealer principal of Hennessy Automobile Cos. in Atlanta. Hennessy has 11 dealerships in Atlanta, including Lexus, Honda, Buick and Cadillac. He uses systems from both Reynolds and its largest competitor, ADP Dealer Services.

"We have always heard that the UCS operating system is very effective, but we have reservations about how they will handle contracts in the future, and only time will tell," Hennessy says. "But we're looking forward to the new relationship."

O'Neill explains the change

In an e-mail to Reynolds employees last week, O'Neill acknowledged that his vice chairman title "is different from what we have been talking about."

Brockman's decision to name himself chairman came after the two executives considered leadership structures, O'Neill said.

"One of the big benefits of the merger really is UCS' strength in developing excellent products very efficiently," he said. Brockman "needs to get into that. Quite frankly, the new chairman … needs to get to know (the company) as quickly as possible."

O'Neill acknowledged that some dealers have confronted him about the merger. He said he tells them: "We can demonstrate to you that in fact we are going to do business in a way that reflects the Reynolds approach to doing business with customers."

Calls placed to UCS in Houston were not returned last week.

The $40 share purchase price represents a 14 percent premium over the stock's closing price of $35.08 on Aug. 7, the last trading day before the deal was announced. As a subsidiary of Universal Computer Systems, Reynolds will keep its headquarters in Dayton.

Dealers now using a Reynolds system will not see any radical changes, O'Neill said. He said he will keep his management team in place, "but I suspect there will be some change over time."

You may e-mail Ralph Kisiel at rkisiel@crain.com