Thoma Bravo Closes J. D. Power Buy

Thoma Bravo Closes J. D. Power Buy

J.D. Power, a provider of data analytics and consumer intelligence, has merged with Autodata Solutions, a portfolio company of Thoma Bravo. J.D. Power was acquired by Thoma Bravo from London-based XIO Group. Thoma Bravo acquired Autodata Solutions in May 2019 from Internet Brands, a portfolio company of KKR.

Autodata provides software and SaaS solutions that are used to increase the effectiveness of the automotive sales chain. The company’s products range from back-end automation systems that enable dealer-to-OEM vehicle ordering to data-driven marketing initiatives such as brand websites, dealer websites, and dealership sales tools. Customers of Autodata include most of the automotive companies in North America including Chrysler, Ford, GM, Nissan, Toyota, Mazda, Honda, Hyundai, Kia, Volvo, and Jaguar. The company, founded in 1990, is headquartered in London, Ontario and Troy, Michigan.

J.D. Power is a global provider of consumer insights, advisory services, data, and analytics. The company conducts surveys of customer satisfaction, product quality, and buyer behavior for industries ranging from cars to marketing and advertising firms. J.D. Power is best known for its customer satisfaction research on new-car quality and long-term dependability and its service offerings include industry-wide syndicated studies, proprietary research, consulting, training, and automotive forecasting.

The Costa Mesa, California-headquartered firm, led by CEO Dave Habiger, has over 800 employees and 16 offices serving North America, South America, Asia Pacific, and Europe.

J.D. Power was founded in 1968 by James David Power III. He later sold the company to McGraw Hill Financial in April 2005 for $400 million. XIO Group acquired J.D. Power in September 2016 from McGraw Hill Financial (now S&P Global) for $1.1 billion.

“We saw J.D. Power as an iconic brand with strong upside potential and have been greatly impressed with the management team’s accelerating the digitization of the platform, including the successful implementation of AI initiatives and the introduction of innovative analytics products,” said Joseph Pacini, CEO of XIO Group. “As we exit our investment, we wish them every success in the years ahead.”

The purchase price for J.D. Power was not released by either Thoma Bravo or XIO Group but industry sources report that the company was being valued at up to $1.9 billion. Further, a source familiar with this transaction reports that J.D. Power’s trailing twelve-month EBITDA is approximately $135 million.

The newly combined company led by CEO Dave Habiger, will operate under the name J.D. Power and will be headquartered in Troy, Michigan. Autodata Solutions will operate as a division of J.D. Power and will be led by President Craig Jennings, the former president and CEO of Autodata Solutions.

As part of the merger transaction, J.D. Power’s management team will reinvest their ownership interest in the newly combined company, and all Autodata Solutions and J.D. Power employees will have the opportunity to take an ownership stake in the company.

“The combination of J.D. Power’s deep data, analytics, and customer experience insights with Autodata Solutions’ comprehensive vehicle feature data and dealer and manufacturer technology platforms will create a robust and insightful automotive industry resource for analyzing consumer demand and optimizing the vehicle sales process,” said Mr. Habiger. “As the auto industry continues to be disrupted by changing patterns of consumer behavior and new technologies such as connected vehicles, electric vehicles, autonomous vehicles, and ridesharing, we are building a company that will help the entire industry rise to the challenge.”

“The joining of these two leading companies will enable the auto industry to make the process of configuring, ordering and selling cars more efficient, which can improve profitability and capital deployment,” said Scott Crabill, a managing partner at Thoma Bravo. “This capability is exactly the kind of proven, concrete insight the auto industry needs as it confronts changing consumer demands in a transforming technology environment.”

Thoma Bravo specializes in investing in application, infrastructure and security software and technology-enabled services businesses. The firm’s investments typically are in the form of take-private transactions, leveraged buyouts and growth equity investments in established companies that have or can quickly reach EBITDA of greater than $50 million. Thoma Bravo has offices in Chicago and San Francisco.

XIO Group has more than $5 billion of committed capital and invests in companies across North American and Europe. The firm is headquartered in London with additional offices in Germany, Switzerland, Hong Kong and mainland China.

© 2019 Private Equity Professional | December 20, 2019

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