F&I product and reinsurance provider Portfolio Holdings has agreed to acquire competitor National Automotive Experts/NWAN. Combined, the company will rank among the top 10 largest F&I product providers in the nation, executives said.
The acquisition continues an ongoing trend of F&I product company consolidation. Portfolio CEO Brent Griggs said the company has watched an uptick in mergers and acquisitions in the F&I product space over the past five years and noted some of the pressures from the competitive environment drove the need to acquire another company.
“We see consolidation happening in a much more rapid fashion than it has in the past,” Griggs said. “It’s just inevitable because there are100-plus F&I administrators out there, many of them very small. And it’s just a very efficient way of delivering this product to dealer customers.”
Griggs cited significant acquisition activity in the past few months alone, noting the recent purchase of American Auto Guardian Inc. by insurance services company Amynta Group last September and the acquisition of IAS Parent Holdings by Canadian insurance company iA Financial Group in December. Last May, United Development Services was acquired by Brown & Brown Dealer Services. And last November, the combined companies purchased Dealer Marketing Link, a Pennsylvania-based F&I operation.
“Portfolio has a strategy of growing organically. Obviously, we need to keep that going. But we also know that we’re not going to be able to compete and grow unless we have some sizable acquisitions,” Griggs said.
Terms of the acquisition were not disclosed. The acquisition of National Automotive Experts/NWAN, which represents separate divisions of the same company, will close within the next 90 to 120 days, executives at both companies said. Based in Strongsville, Ohio, National Automotive Experts/NWAN sold about 500,000 F&I contracts last year, according to founder and CEO Kelly Price. Portfolio, by contrast, sold more than 2 million contracts through its dealer partners, up from 1 million in 2013, according to Griggs.
