Safelite Sold: The Details
It was, of course, stunning news. As first reported by glassbytes.com™ on January 15, Belron has officially announced its purchase of Safelite Glass Corporation. The sale is said to include all Safelite holdings including its manufacturing plants, its infamous "network" and claims administration areas.
With one stroke of the pen, the London-based company will become the largest provider of auto glass replacement services in the United States. And its return seven years after exiting the market in disgust as a minority partner in the very same company have set tongues wagging.
Shortly after the Safelite-Belron partnership, Belron CEO Gary Lubner swore his company would never again be in a minority equity position in a company. "We learned quite a lot by doing it," he said in an interview with AGRR magazine in 2004, "and it's not something we will ever do again."
In that same interview, Lubner did say that the United States was "a market we will come back to." And Belron has now done so in spectacular fashion. It had dabbled in the United States during the past few years, purchasing well-known, well-managed regional operators such as Elite Auto Glass of Colorado and Glasspros of California.
Speculation was that Belron was just getting its proverbial feet wet with such acquisitions and would soon conclude that achieving large growth and volume would only be possible with a nationwide coverage presence, stronger relationships with insurers and a forceful claims administration mechanism. The purchase of Safelite gives the company all three. It is not yet known exactly what changes in business practices and personnel Belron will bring to Safelite.
Initial reaction has been mixed with no one wanting to be identified by name. "LYNX is really going to need to step up," said one, "with the exception of Safelite itself, it will be affected more than any other company." "There are aspects of this that could actually be good," said another. "One thing that Belron does is turn a strong profit, and that could be good for the whole industry. They are not about taking value out of the market."
NAGS, too, may be feeling a bit more in the crosshairs in the next few months. Lubner has made no secret of his lack of regard for the publisher of auto glass information. In a speech before auto glass managers last year, he told the audience that NAGS had lost the confidence of the industry and that changes needed to be made.
Then, as well as in the AGRR magazine interview, he praised the work of the Chicago Group to develop an alternative pricing model. Today, many of the leaders of the Chicago Group effort-including Topping and Dave Leach, formerly of IBS, work for Belron.
Glassbytes.com™ will have much more coverage about the reaction and ramifications of the purchase during the next few days. Stay tuned for coverage.
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