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LYNX, GLAXIS, GTS SOLD! Solera Acquires Claims Assets

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  • #16
    This is all very interesting. My question comes from what I have seen with my own two eyes for the past several years. Lynx has allowed "customized" offers to be made by retailers for a specific insurer (this is my understanding and opinion; please feel free to correct me Gary or the Admin.) What I have noticed is that Safelite retail glass has always "low-balled" on these "customized" offers. Thus, Lynx refers the claim to a Safelite store and Safelite buys some PGW glass to make the wheel go "full circle" or reciprocates in what can only be observed as a symbiotic relationship.

    What I do not understand are the terms of the purchase (but my husband is a former IB from NY) and he will look at this and tell me if Solera is buying the glass manufacturing and distribution end of this as well. If they have bought it (and "overpaid" as "DL1" suggests) I fail to see how this makes much sense unless Solera has some magic formula to keep the frictional costs down (our's and many other shops' short pay litigation) and continue to keep down their average comprehensive loss for insurers. Safelite filled this gap for them and I know it.

    Does this purchase involve the manufacturing and distribution of glass, or; is this strictly Solera buying the Lynx, Glaxis, Claims, and GTS businesses? Wasn't this more money (double) than the last acquisition where PGW still owned a 40% stake in the deal?

    I would tend to defer to Gary's read on technology. Wouldn't it be nice (like the "Beach Boys" song) if we got the 3rd party out of our business? If Solera has a way to do this where Safelite's retail location's "number" isn't called on "every play" (like Durant/Westbrook or James/Wade at the end of a playoff game), then I'm all ears. Otherwise, it's the "same day with a different story" being told and my store has to get paid for our liability of restoring the safety system in our customer's vehicles.

    I don't want to hear any more of this 20%, 25%, 35%, or 48% off of HAGS and some flat rate amount for the labor that someone like Safelite has pulled out of their backside, years after the last re-balance. We sell at NAGS list and go from there.

    Each vehicle is different despite whatever GAI scheme has been employed by Solutions. Maybe this Aquila guy can teach Feeney about building a business based upon the costs of each repair or replacement?

    I am lost about this Staglin character but he seems to put his fingers in the same or different pies when he has a whim to make a bundle of cash; must be nice to be like that. Gary, I do remember hearing a similar story about the origin of Solera and believe what you say about him - for now. I have yet to hear of (or have met) a "champion" of a glass or a collision shop that comes from an I.T. company except you and your old buddy who helped us.

    Other than that, what am I missing?

    WELCOME to the Buzz DL1 - Elaine P.

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    • #17
      Originally posted by ElaineP View Post
      This is all very interesting. My question comes from what I have seen with my own two eyes for the past several years. Lynx has allowed "customized" offers to be made by retailers for a specific insurer (this is my understanding and opinion; please feel free to correct me Gary or the Admin.) What I have noticed is that Safelite retail glass has always "low-balled" on these "customized" offers. Thus, Lynx refers the claim to a Safelite store and Safelite buys some PGW glass to make the wheel go "full circle" or reciprocates in what can only be observed as a symbiotic relationship.
      No, this is probably not a practice that Safelite and LYNX perform between the parties. How have you noticed this practice? This all sounds pretty made up to me and counterintuitive to both companies processes.

      Originally posted by ElaineP View Post
      Does this purchase involve the manufacturing and distribution of glass, or; is this strictly Solera buying the Lynx, Glaxis, Claims, and GTS businesses? Wasn't this more money (double) than the last acquisition where PGW still owned a 40% stake in the deal?
      Strictly the IS business unit as the press release pointed out (LYNX, GLAXIS, GTS).

      Originally posted by ElaineP View Post
      If Solera has a way to do this where Safelite's retail location's "number" isn't called on "every play" (like Durant/Westbrook or James/Wade at the end of a playoff game), then I'm all ears. Otherwise, it's the "same day with a different story" being told and my store has to get paid for our liability of restoring the safety system in our customer's vehicles.
      You keep referring to Safelite being some sort of preferred provider for LYNX Services. What proof do you have of this because I have never heard such a thing between two competitors?

      Originally posted by ElaineP View Post
      I don't want to hear any more of this 20%, 25%, 35%, or 48% off of HAGS and some flat rate amount for the labor that someone like Safelite has pulled out of their backside, years after the last re-balance. We sell at NAGS list and go from there.
      Then stop going by NAGS pricing all together and worry more about a decent cost plus formula instead. O&A discounts are pretty much here to stay unless you direct bill/short pay litigate.

      Originally posted by ElaineP View Post
      Each vehicle is different despite whatever GAI scheme has been employed by Solutions. Maybe this Aquila guy can teach Feeney about building a business based upon the costs of each repair or replacement?
      Not entirely true at all. For the most part, labor times and the installation process are pretty close to one another for the top 100 parts. And the GAI isn't something unique to just SGC but all TPA's.
      Best Regards,

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      • #18
        Elaine, To Gary's point, I would guess if you surveyed chain operational people, you would find their feelings regarding their relationship with Lynx is pretty similar to how Indys feel about dealing with national chains. Any businesses that are competitors will not be in the business of making it easy on the other.

        As far as any average price goes, It is simply a marketing tool to quantify value to the business. If you pitched an account, had full understanding of their historical needs and did the math, you could figure out a safe number that ensured your profit and meant something more to the customer than "X off + Y labor". It gives the customer a measurement and a budgeted expense. If you owned a truck line for example, and knew that on average you replaced 10% of your fleet windshields, if a vendor came in and offered an average of $175 or whatever, you could multiply it out and figure your estimated spend. The vendor would know what they have promised and if the trend is turning toward higher dollar replacements, they can increase their efforts on repair via more lot walks etc.. The more data you get from the customer, the more accurate you will be in your projection. For a very small account with a wide range of history, it can be tough...for huge accounts, it isn't. At the level TPAs operate, the data is massive and it isn't necessarily a high risk way to market, especially considering that you can lower the average by bolstering repairs and other low ticket work. Without speaking of any specific deals, the idea that every ticket is $X is not really accurate. Its not really unique to glass and more about understanding how to quantify whatever benefit you are offering the prospect.

        Its really not much different than the old strategy of going to a dealer with a flat price per job. You know that you will win most and lose a few, but by keeping the overall account, you will eventually lock in profit pretty close to where you planned. These deals seem to have gone by the wayside with more part price variance, but there are still quite a few companies that use them.

        Elaine, you also mentioned my comments about how much was paid for the business. It is very rare for a business in our industry to sell for such a high multiplier. I don't know if I said ridiculous...but I what I meant to convey is that Solera has put a train load of eggs into this basket. Without the tax benefit considerations, it will take them almost 11 years to get their money back based on the Lynx profit - which is an eternity. That tells me that they have to go big. I'm not sure that will benefit glass shops at all, but only time will tell.
        Last edited by DL1; 05-15-2014, 05:12 PM.

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        • #19
          Sounds like a great opportunity for another Safelite buy. Thats what they do.... Why would you think they wouldn't?

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          • #20
            Originally posted by MACape View Post
            Sounds like a great opportunity for another Safelite buy. Thats what they do.... Why would you think they wouldn't?
            Ok, now it sounds like a Safelite employee is amongst us. You really believe that Safelite can purchase Solera Holdings? Are you serious?

            Out of no where, MACape starts posting after a very long absence and who was one pro-independent is singing the praise of Safelite. Did they give you the rose color glasses when you signed your soul away?
            Best Regards,

            Comment


            • #21
              I'll take a crack at that....

              Solera has a market cap of $4.5 Billion, D'ieteren, Belron's parent, has a market cap of about $2.3B.

              That would be one reason they wouldn't.

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              • #22
                DL, have you ever considered taking a utterly thankless job with a huge cut in pay? When Gary jumps ship to join Solera there would be an opening for someone with exceptional talent. Not that we haven't had differences, you have an excellent resume for a position like this. In your career you have rubbed elbows with installers, shop owners, the Chicago Group, the big boys; where would the association find anybody with true industry experience like yours? You have demonstrated excellent communication skills, without the need to attack anyone who disagrees; and the ability to adjust your message so your audience can grasp your points. The industry needs a true leader, a conspiracy theorist might think that is why Belron make the split, so you could infiltrate the independents.

                Your taking the job, for you personally would be like a kick in the crotch, but the industry would benefit in the long run.
                Last edited by Icarus; 05-18-2014, 07:27 AM.

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                • #23
                  And buy did you hit the nail on the head "utterly thankless job"; however, that is not why someone like myself takes on such a position as the one I am in now. There are real problems with real solutions that no one wants to address in this industry. I receive calls all of the time saying "why are you fixing this" or "why are you doing that." The pattern of armchair quarterbacks is amazing and it is also spectacular how people make things up all of the time.

                  It is interesting that when I simply write about how things for the industry may change with Solera now being a part of it that it parlays into me jumping ship at some point as you put it. This is exactly the example of what is holding us back from making real progress in our industry. Sure, you are welcome to your opinion and yes, GlassBuzz is a platform that allows the open exchange of ideas and discussions but why turn it in to another glassBYTE's message forum?

                  Let's dare to be different here.

                  Originally posted by Icarus View Post
                  DL, have you ever considered taking a utterly thankless job with a huge cut in pay? When Gary jumps ship to join Solera there would be an opening for someone with exceptional talent.
                  Best Regards,

                  Comment


                  • #24
                    Icarus, thanks for the kind words. I think Gary has shown a respectable level of commitment to the IGA and see nothing that indicates he is changing his direction. I have disagreed with the agenda of the organization over the years, but one thing holds true; Today it is really the only avenue for ARG independents to leverage their combined strengths. JMO, To advance and compete in our industry today and going forward, collaboration is critical and my advice to those that think they are on the wrong path would be to pick up an oar... if enough people came together, the agenda would change to fit. Until cooperation is real and voices are heard from all levels of the industry (from the extremely successful to the struggling), the "solution" is limited to a fraction of what it could be. My advice to the IGA would be to find a way to get a very broad cross section of leaders, from businesses small and large, together and see if it is possible to create a more representative agenda, or if that already exists, figure out a marketing strategy that makes it a "must" to be a member. Gotta build the army before fighting the war. Maybe that has already been done....like I said, I think Gary seems to be plowing ahead and I know it is incredibly difficult, so I have a great deal of respect for the effort.

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                    • #25
                      Originally posted by DL1 View Post
                      ...collaboration is critical and my advice to those that think they are on the wrong path would be to pick up an oar... if enough people came together, the agenda would change to fit. Until cooperation is real and voices are heard from all levels of the industry (from the extremely successful to the struggling), the "solution" is limited to a fraction of what it could be.
                      DL is right on the mark. I cannot stress enough how critical it is that independent glass retailers become involved in the association. The IGA has formed zones that are assigned directly to IGA board members. These zones allow members to directly communicate their issues, etc. for use and consideration on a national level. The IGA also actively includes industry partners through their own committees to address issues that they can impact through their participation. At the end of the day, the IGA acts on behalf of what the membership charges it to accomplish.

                      Originally posted by DL1 View Post
                      My advice to the IGA would be to find a way to get a very broad cross section of leaders, from businesses small and large, together and see if it is possible to create a more representative agenda, or if that already exists, figure out a marketing strategy that makes it a "must" to be a member. Gotta build the army before fighting the war. Maybe that has already been done....like I said, I think Gary seems to be plowing ahead and I know it is incredibly difficult, so I have a great deal of respect for the effort.
                      The IGA does have a very broad cross section of leaders from small shops to large suppliers and everything in between. We have many programs, private forums and more. Our programs are unmatched compared to those in the past. We advocate and are more actively involved with the industry than at any other time in the history of the IGA.

                      Our agenda is simple and is on our website: The Core of the Automotive Glass Repair and Replacement Industry
                      The Independent Glass Association (IGA) is a community of people — independent glass shops, industry representatives, educators and technicians - committed to safety and proper repair or replacement. Through education, knowledge sharing, advocacy, community building and outreach, we strive to advance the automotive glass repair and replacement industry and, in the process, to demonstrate and celebrate the power of quality service to positively change people’s lives. Our members engage in a variety of professional programs and activities through a network of chapters throughout the United States, Canada, and beyond. You can learn more about our latest initiatives by reviewing our strategic plan.
                      Founded in 1995, the IGA is the oldest, largest and leading professional organization for the automotive glass repair and replacement (AGRR) industry. The IGA inspires and enriches our members by promoting the value of safety, quality and business know-how. Professional members of the IGA must pass rigorous acceptance standards, including a combination of accredited safety education and/or full-time work experience and passage of a accreditation examination administered by the National Council for Auto Glass Qualification (NCAGQ) or the Automotive Glass Safety Council (AGSC) formally known as AGRSS.
                      IGA Industry Partners include suppliers and distributors with some 500+ individual representatives, uniting the professional member with manufacturers of industry-related products and services.
                      There is a lot that the IGA is doing and has done. We continue to shape the industry and have made great strides in reducing the friction that administrators and their partners inflict through their interference practices. The IGA also has been promoting "self awareness" for shops to realize their own growth and success starts with them.

                      I appreciate all of the support and assistance the industry provides and I thank DL for his kind words.
                      Best Regards,

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