GPB Capital-backed Capstone buys majority stake in Prime Motor Group


Capstone Automotive Group, which is backed by GPB Capital, has acquired a majority stake in Westwood, Massachusetts-based Prime Motor Group, a private auto group. No financial terms were disclosed.

PRESS RELEASE

NEW YORK, Oct. 23, 2017 /PRNewswire/ — Capstone Automotive Group (“Capstone”), an affiliate of GPB Capital, has acquired a majority equity stake in Prime Motor Group (“Prime”), which operates more than 25 dealerships and related businesses in Massachusetts, Vermont, New Hampshire, and Maine. The deal establishes Capstone’s presence in the New England market.

The purchase is expected to generate synergies that can help GPB Capital continue to grow its automotive retail footprint, as well as streamline operations, finance inventory, and optimize business management at all of its dealerships.

The acquisition of Westwood, Massachusetts-based Prime Motor Group (http://www.driveprime.com), which included the underlying real estate for its dealerships, was finalized in October 2017, and terms were not released. In total, Prime’s dealerships—which provide new and used cars, and meet customers’ ongoing parts and service needs—generated more than $1.4 billion in top-line revenue and sold approximately 35,000 cars in 2016. Prime brings new brands to Capstone’s dealerships, including core brands Toyota and Honda, and as well as luxury brands Acura, Mercedes-Benz, and Volvo. Last year, Automotive News listed Prime as one of America’s Top 30 private auto groups based on total revenues.

“As the automotive retail industry continues to adapt to advancements in technology and shifting consumer preferences, the combination of Prime’s visionary management team and Capstone’s support can help Prime prosper and expand as a leading provider of vehicles, parts, and service in New England,” said David Gentile, Founder and CEO of GPB Capital. “We look forward to leveraging Prime’s proven ability to optimize dealership performance and operations in order to benefit customers in all the markets served by our dealerships.”

Prime’s founder, David Rosenberg, will continue to serve as CEO, and daily company operations will not experience any changes. His family has a stellar reputation among New England consumers. Mr. Rosenberg’s father, Ira, founded Ira Motor Group, one of Boston’s most well-known auto dealership groups. After assuming the reins from his father in 1998, Mr. Rosenberg facilitated the sale of Ira Motor Group to the publicly traded Group 1 Automotive in 2000 and stayed on as Platform President until 2006. He left Group 1 Automotive to focus on building Prime, which he established upon purchasing two New England auto dealerships in 2006.

“We have always been a family business committed first and foremost to our customers, employees, and communities,” said David Rosenberg, CEO and President of Prime Motor Group. “Our partnership with Capstone will enable us to adapt and grow without sacrificing the customer service and employee dedication that define our culture.”

Capstone hopes to purchase additional new dealerships in New England under the Prime platform, and expand into the Rhode Island market, in the coming months, and raise its annual revenue to $4.5 billion within the next five years. Prime’s growth plans also include increasing its personnel from 1,800 staff members to more than 3,000 over the next three years. In addition, Prime will work with Capstone to develop proprietary customer-friendly software to streamline operations, create efficiencies, and lower costs. Capstone’s resources and support will also help Prime open its own body shops in order to expand and improve the auto services it provides to customers.

“This acquisition presents Capstone with a promising opportunity to not only expand our geographic reach in the automotive retail sector, but also run all the dealerships under our umbrella more effectively and efficiently,” said Jeffry Schneider, Strategic Advisor to GPB Capital. “We are proud to partner with David Rosenberg and the Prime Motor Group team to continue to execute on our mission to build a world-class, diversified automotive retail group.”

GPB Capital will seek to further strengthen Capstone’s existing dealerships by leveraging the expertise of Prime’s senior leadership team to create a corporate structure designed to increase profit margins and lower costs while facilitating scalable growth and optimizing service offerings.

About Capstone Automotive Group
Capstone Automotive Group is a New York-based group that partners with mature, income-producing automotive dealership franchises to help them achieve the next level of growth and profitability. Franchised auto dealerships comprise one of the largest industries in the U.S.—but also one of the most fragmented. This has historically prevented many of them from achieving their growth and service objectives. By working closely with franchised auto dealerships’ management and operating teams, Capstone can help them add value for customers, run their businesses more efficiently and effectively, and facilitate scalable growth over the long term. For more information please visit www.capstoneautomotivegroup.com.

About GPB Capital Holdings, LLC
GPB Capital is a New York-based alternative asset management firm focusing on acquiring income-producing private companies. GPB Capital provides their portfolio companies with the strategic planning, managerial insight, and capital needed to enable strong businesses to achieve the next level of growth and profitability. GPB Capital has over $1.35 billion in assets under managementi and has acquired or invested in more than 100 portfolio companies. For more information, please visit www.gpb-cap.com.

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