To accelerate growth to meet customer demands, Auto Driveaway Franchise Systems was recently acquired by an investor group led by President and CEO Rodney Ruth.
The acquisition was described by the company as a recapitalization transaction — essentially, a capital restructuring.
“This means the company brings in new investors, generally with controlling interest, alongside some of the existing investors, who continue to have a minority ownership stake. That’s exactly what we did in this transaction, and some of the original investors reinvested in the new ownership group,” Ruth explained.
The recapitalization of Auto Driveaway allows the Lombard, Ill.-based company to expand its services and provide “a more universal approach to all types of fleets, vehicles, and customers,” according to Ruth.
“We’ve been doing very well as a company, and recognized that new capital would best position ourselves for future growth. This transaction is an opportunity for us to better serve our customers and further invest in the long-term success of the business,” Ruth said.
Founded in 1952 by the late John Sohl, Auto Driveaway originated as a single location specializing in transporting private vehicles to and from the East Coast and “snowbird” homes in Florida. Today, Auto Driveway operates a national network of 40 company-owned and franchised offices providing private vehicles, large corporate fleets, and vehicle leasing and management companies with fast, safe, and reliable door-to-door transportation services.
The new liquidity provided by this recapitalization gives Auto Driveaway better access to capital needed for growth initiatives and greater flexibility in making quick decisions when opportunities arise.
“For instance, we have a large senior group of franchise office owners. With this new structure, we can now offer our franchisees the opportunity to capitalize on their hard work by acquiring those offices if they want to sell and retire,” Ruth added.
Expansion Through Technology
One area of Auto Driveaway’s business that will benefit from the new capital is its technology platform.
Auto Driveaway launched a new internal system last fall designed to improve communication between company offices and customers, as well as improve integration with outside customer software sales platforms. Through this system, the company provides customers with online access to precise quotes, timely orders, and efficient delivery tracking notifications.
According to Ruth, Auto Driveaway plans to further expand this system, which is scheduled to be fully implemented by the end of the first quarter of 2015.
“Moving cars from A to B doesn’t really change. You need to have a driver. You put the driver in it, and pick it up at a location, and bring it to another location. But, the methods of communicating that to our offices and to our customers have changed drastically over the years. With this new ownership group, I know we can accelerate and adapt to that change, and ultimately better prepare ourselves for the future of this industry,” Ruth said.
By leveraging this capital, Auto Driveaway plans to improve the services it currently provides and create new offerings that align with its vision of the best door-to-door transportation service nationwide.
“We’re fortunate to have such a fantastic group of investors and longtime Auto Driveaway members who can help us improve and expand our services to best meet our customer needs,” Ruth said.
Originally posted on Automotive Fleet