Huron Capital Completes the Sale of XLerate Group
DETROIT, Mich. — Leading lower-middle-market private equity firm, Huron Capital, announced that it has sold its interest in the nationwide used car auction and remarketing platform, XLerate Group (“XLerate”), to Brightstar Capital Partners (“Brightstar”), a New York-based middle-market private equity firm. The transaction was completed on September 27th.
As part of our proprietary Huron Capital ExecFactor® program, in 2014 we partnered with Huron Operating Partner, Cam Hitchcock, to pursue a buy-and-build strategy in the auto remarketing services industry. XLerate has grown rapidly over the past seven years through both add-on acquisitions and organic growth into a larger, more technologically advanced group of national automotive auction sites and is poised for additional growth. Terms of the transaction were not disclosed.
Working in partnership with management, we successfully transformed XLerate from a traditional, on-site, wholesale auto auction business into a multi-site, multi-platform, tech-enabled leader in the industry. Management executed on multiple strategic initiatives to diversify sales channels, drive auction volumes, expand service offerings, and better serve its customers. XLerate has the ability to offer in-lane, mobile, and digital auctions in addition to a broad array of ancillary services.
“We had a clear vision when we established XLerate Group with Huron Capital and, together, have achieved many of those goals to establish XLerate as a leader in the used vehicle remarketing industry,” said Cam Hitchcock, CEO of XLerate. “We see enormous potential for this business and the sector as a whole and are confident we can continue our momentum in the market with Brightstar’s additional support as we transition to a new ownership structure. Our aim will be to solidify XLerate’s leading positions in the markets we serve and continue to expand in this industry through strategic investments in technology and other avenues for growth.”
“We are honored to have had the opportunity to work with Cam and the XLerate team over the past seven years and look forward to our continued partnership,” said Peter Mogk, Senior Partner at Huron Capital. “Our investment strategy with XLerate delivered great value for our investors and built a strong value proposition for key stakeholders, customers and employees alike. We wish them well in the next chapter of their growth under new ownership.”
To support rapid growth and scale efficiently, we professionalized corporate operations and built a sophisticated business intelligence function at our corporate headquarters. Additionally, the methodical implementation of standard operating procedures, formalized KPI metrics, and centralized vendor relationships allowed XLerate to simplify operations and streamline costs, driving measurable improvement at each location. Our efforts propelled XLerate to become the clear acquirer and partner of choice for founder-owned auto auctions.
Through Huron Capital’s ExecFactor® investment model, XLerate completed 11 add-on acquisitions, expanding its geographic footprint from 6 to 12 states located throughout the South, Midwest, and Northeast. Today, XLerate operates 17 auction sites in California, Florida, Georgia, Illinois, Michigan, Ohio, Pennsylvania, South Carolina, Texas, Indiana, Louisiana, and Wisconsin. Our efforts resulted in a 3-fold increase in revenue, a 4-fold increase in EBITDA, and transformed XLerate into the nation’s 4th largest and fast-growing full service used-car auction.
The sale of XLerate is Huron Capital’s fourth exit this year.
About Huron Capital
Founded in Detroit in 1999, Huron Capital is an operationally focused private equity platform with a long history of growing lower middle-market companies through our proprietary ExecFactor® buy-and-build investment model. We prefer complex situations where we can help companies reach their full potential by combining our operational approach, substantial capital base, and transaction experience with seasoned operating executives. An early pioneer of the buy-and-build approach, Huron Capital has successfully established six private equity funds aggregating nearly $2.0 billion in committed capital and invested in over 235 companies, and our portfolio companies have employed over 11,000 people throughout North America. The Huron Capital buy-and-build investment model includes equity recapitalizations, family succession transactions, market-entry strategies, corporate carve-outs, and management buyouts of companies having revenues up to $200 million. Huron Capital targets both control and non-control equity stakes in fundamentally-sound companies that can benefit from the Firm’s operational approach to creating value. Huron Capital focuses on niche segments within commercial & industrial services, professional services and the consumer services sectors. For more information, please visit: www.huroncapital.com.
About XLerate Group
XLerate Group is a leading full-service used-car auction services provider that facilitates the wholesale remarketing of used vehicles for B2B customers, delivering a critical liquidity function for the used car sales ecosystem. Based in Carmel, IN, XLerate facilitates the selling and buying of used vehicles at physical auction sites across 12 states as well as on digital platforms. The Company also has a full-service dealer floorplan affiliate, XL Funding. The company’s daily mission is simple and straightforward: provide the highest quality service and operational execution for dealers and institutional customers. For more information, please visit https://www.xlerategroup.com.
Certain information herein may contain forward-looking statements which are provided to assist the reader in understanding the beliefs and opinions with respect to future opportunities as perceived by Huron Capital and others quoted herein. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance in future periods to differ materially from any projections or results expressed or implied by such forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The issuer of these statements undertakes no obligation to update forward-looking statements if circumstances or estimates or opinions should change except as may be required by applicable securities laws.