As announced yesterday on glassBYTES, the Belron purchase of Madison, Wis.-based Auto Glass Specialists (AGS) is now complete and Rich Harrison has been named regional vice president of sales in the Midwest.
What effect will the merger have on the industry, and will it, as some might fear, mark the downfall of the independent? Former AGS president Bob Birkhauser doesn't think so.
"Consolidation has been upon us for some time now. This continues that trend. I think small businesses - companies referred to as mom and pop shops- are going to survive and they have a place in the market," he said. "Midsize players are most vulnerable and that was the arena we were in. We had to merge or consider the drastic movement of downsizing."
Though Belron's acquisition of AGS seems sudden, particularly as it comes on the heels of the company's purchase of the Canadian operations of TCG International and within a year of purchasing Elite Auto Glass in Denver, Colo., Birkhauser, like those before him, explains that it wasn't a rash decision to sell.
"I needed scale. [AGS has] a good model and strong branding, good market share and ability to get more, but I needed to leverage that and we needed more scale - more size. Administrative costs were top heavy and I needed to grow, not invest more into general and adminstrative expenses. We had to either acquire or merge with another entity. We started exploring both possibilities a couple of years ago and this is what happened," Birkhauser explained.
Now that the transaction is complete and Harrison in place to lead the company known for its "little red trucks," Birhauser won't be riding off into the sunset any time soon. Though he sold AGS and its name, he remains the owner of AEGIS Tools International.
"I started the AEGIS Tools back in the early '80s, and I'm going to have some fun building that business up now," he said, explaining that the company already has plans to bring a new tool to the market in early 2006 and plans to develop other products are already in the works.
Though the sale of AGS to Belron raised some eyebrows and spurred discussions across the industry, Birkhauser is happy with the outcome.
"I'm very pleased we were able to align ourselves with Belron. I've known Belron people for more than 30 years," he said. "They're very committed to a lot of the ideals and professional standards that we've embraced at AGS and I think they'll take it to the next level."
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