Greenbriar Announces Acquisition of JEGS Automotive

[mikebcurve]

I asked if anyone else had heard these rumors a while back. Guess it was true. Too bad. I’m not a fan of investment company acquisitions. I’ve been through them and they rarely work out best for employees or consumers in the end.

Greenbriar Announces Acquisition of JEGS Automotive - Greenbriar Equity Group

Greenbriar to support continued growth of leading online aftermarket auto parts & accessories retailer and distributor

www.greenbriarequity.com

 

[4onthefl4]

Oh boy, another corporate takeover.

 

[mgty3whlr]

I heard the rumor a little while back but never heard anything of the outcome. Just saw it on my feed this morning. I know a lot of people were unhappy with their customer service. I wonder if this is gonna impact all of the money that they pump into their racing sponsorship?

 

[Cliff]

Maybe things will work out OK. Have to hope.... So will Jegs change the color from yellow to green? Ohhhh, bad pun..........

 

[Butch]

As typical by the time a few generations manage a business it folds or sells out = Take the money and run.
Sad to see this happen at Jegs.

 

[sammi]

Can anyone conversant in meely mouth business lingo translate this for me?

Jeg Coughlin III, President of JEGS, added, “The entire JEGS team has never been more excited about the opportunities that lie ahead, and we look forward to partnering with Greenbriar and their extensive network of sector experts as we focus on enhancing our customers’ online experience, onboarding new products and services, and expanding our reach through organic and M&A-led growth.”

 

[SoCal Racer]

I heard the rumor a little while back but never heard anything of the outcome. Just saw it on my feed this morning. I know a lot of people were unhappy with their customer service. I wonder if this is gonna impact all of the money that they pump into their racing sponsorship?

My personal experiences with Jegs customer service have always been good, but it's been a while since I've needed to contact them. I try to share the love between Jegs and Summit when buying everyday aftermarket parts because I really try to support the companies that support our sport. I'll continue to do so until there's a reason not to.

I do hope they'll contiunue to pump dollars into the sport...

 

[z28]

What it comes down to is go big or go home. The family will retain some interest in the business (much like Shoemacher did) and have access to more $$$ and knowledge to expand. Usually these deal include provisions for the current big wigs to continue with the business for a period of time to keep folks in line. If they don't produce as expected they will soon be gone.

 

[SoCal Racer]

Regarding the business lingo.... "organic reach" is using social networking platforms to reach potential customers in a less confrontational way than banner ads screaming "BUY THIS." More of a "Hey, we're here. Don't forget about us next time you need our products or services." It also is without cost as compared to paid advertisements. M&A is mergers and acquisitions.....maybe they are thinking a conglomerate type thing like all the companies that have become part of Holley through acquisitions? I don't know, but it would be interesting to see their business plan.

 

[ironpony]

from my experience in these type takeovers, they will cut to the bare bone, and over appraise hard assets, buildings, property etc.. Then they will sell sell sell artificially inflate the profit margins and sell it off in pieces which will wind up failing and disappearing.
Greenbriar investment firm, they want large profits not to run a business.
JEGS sponsors a lot of the series run at National Trails, I can see this putting a damper on Trails events. It appears they have already cut back on some of the events.

 

[4onthefl4]

Can anyone conversant in meely mouth business lingo translate this for me?

Jeg Coughlin III, President of JEGS, added, “The entire JEGS team has never been more excited about the opportunities that lie ahead, and we look forward to partnering with Greenbriar and their extensive network of sector experts as we focus on enhancing our customers’ online experience, onboarding new products and services, and expanding our reach through organic and M&A-led growth.”

Blah, blah, blah!

 

[Butch]

Yesterday I talked to a friend that was employed at Jegs. The sale had gone through awhile back. He said that he was payed by Jegs and his group hasn't
been hired by the new group. He was involved in a race car at Jegs. There is CBR ( Coughlin Bros. Racing ) That side is intact and not involved in the buyout.
That's about all I care to share without getting too deep that identities can be figured out.

 

[Jim]

I don't know the Greenbriar people or their style so, will wait and see.
Often enough, family businesses just don't have the cash or borrowing ability to "get to the next level".
In any event, I can't imagine any Private Equity investor expecting a a quick cash out - Can't imagine this kind of business (at current or foreseeable future size) going public and triggering a get rich quick (and get out) deal.
Who knows?...if Jegs' has been missing opportunities because of distracted management, a SMART professional partner might actually be a big help (Kinda' wish the PE gang was Penske.)

 

[Jim]

In any event, I can't imagine any Private Equity investor expecting a a quick cash out - Can't imagine this kind of business (at current or foreseeable future size) going public and triggering a get rich quick (and get out) deal.

Private equity deals are all about quick cashouts. They buy a company and charge the company high "management fees." They borrow against the company to pay themselves with the loan while they sink the company deep in debt. Then they start cutting back expenses and laying off employees to cover the debt payment. Eventually, they sell off parts of the company or liquidate it and declare bankruptcy to get away from the debt. And the whole time they are doing it, they take a percentage of revenue as a management fee.

If this situation follows the average deal, Jeg's will be gone in three to five years.

 

[mikebcurve]

One of the companies I was with did it a different way. They hot shot the sales by buying cost down to wholesalers in shady ways to lower the retails and move more product. They met sales numbers by forcing product into manager rented warehouses and when it went outdated it was thrown in a dumpster still counting as product sold. They some how turned one year into a 53 week year. The company that bought it for 321 million were convinced they would also save over 50 million a year by cutting independent distributors and going exclusively warehouse shipped. Suckers bought it and you can hardly find the product any more outside of the core few items.

 

[Randy]

Years ago The Mr. Gasket Company, I believe Hays Clutches, and several others were bought out by the W.R Grace Company. Where's Mr Gasket now? More recently, Holley, MSD, RacePak, etc., were bought out. Trying to get ahold of a live body lately at Racepak became very difficult, which inspired former tech employees like Todd Paton to go out on their own and build a business by giving racers great support. Todd actually answers the phone and works his butt off. I bought from Jegs and Summit but ended up doing more business with Summit because shipping from their location closer to me was one day, plus they had 99% of everything in stock. I hope the new leadership at Jegs does well, and the Jegs employees are able to live with whatever is new in their world after all this.

 

[scratch]

Everything in life will run its course.This is no exception.Good bad or indifferent. Study the Sigmoid Curve. A company can't ride that indefinitely.