HGGC Backs Auto IT Retailer Dealer-FX, Leveraging Acceleration in Car Sales

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Middle-market private equity firm HGGC is investing in automotive software provider Dealer-FX, following its purchase of AutoAlert in 2014.

Dealer-FX, based in Las Vegas and Toronto, provides online services such as making appointments and service check-ins. 

“This is a great opportunity for HGGC to leverage our auto technology experience and follow our success playbook of taking growing companies global,” says Steve Young, HGGC managing partnerand former San Francisco 49ers quarterback.  

 “We’re confident that they can capture greater market share in North America and continue to extend their footprint into international markets.”

 Financial terms of HGGC’s investment are not disclosed.

Tech-focused HGGC closed its second fund valued at $1.3 billion in March 2015. The Palo Alto, California firm closed an impressive nine acquisitions and one exit in 2014, earning the firm Mergers and Acquisition’s 2014 M&A Mid-Mark Private Equity Firm of the Year.

HGGC also owns automotive software company AutoAlert, which it backed in April 2014.

A pickup in global car sales continues to drive automotive M&A.  In July, Lexington, Massachusetts-based Watermill Group purchased Quality Metalcraft Inc., a Livonia, Michigan-based maker of metal parts for vehicles. 

Also in July, Chicago-based LKQ Corp. (Nasdaq: LKQ) said it will buy replacement parts distributor Coast Distribution System Inc. (NYSE: CRV) of Morgan Hill, California for $29 million. 

Evercore is advising HGGC, and Vaquero Capital LLC is serving as financial adviser for Dealer-FX.

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