Once vocal about expanding its collision repair presence, auto retail giant AutoNation Inc. instead will now sell nearly a quarter of its body shops to Caliber Collision under an arrangement it says will deliver a greater return.
The Oct. 12 agreement, set to close in the fourth quarter, includes selling up to 17 body shops and a "long-term" deal for AutoNation to sell parts and refer work to the locations purchased by Caliber, the dealership group said. Financial terms of the deal were not disclosed, nor were the locations AutoNation plans to sell. Caliber did say 220 AutoNation employees would join its company as part of the deal.
Analysts said they don't expect AutoNation will exit the collision business altogether, but one told Automotive News that arrangements between retailers and third-party shops could represent the future of auto body repair for dealerships. Three Mercedes-Benz dealerships in the Northeast generate more than $1 million in annual collision center revenue because of innovative deals with local body shops.
Focus Advisors Managing Director David Roberts, a Caliber co-founder who sold the company in 2008, said the deal raises the prospect that the nation's largest new-vehicle retailer and largest auto body repairer have "figured something out here."