America’s Auto Auction and Auction Credit Enterprises

Headquartered in Dallas, Texas, America’s Auto Auction, Inc, (“AAA”) is a premier provider of vehicle remarketing services, and Auction Credit Enterprises LLC (“ACE”) is an affiliated company providing floor plan financing to independent auto dealers. Trinity Hunt Partners (“THP”) first met with the founders of AAA and ACE in 2011 as part of its thematic research on auction services. AAA had grown methodically since its inception in 2005 through periodic capital raises from high net worth individuals. Recognizing that wholesale auction services for the higher mileage, aged vehicle segment served by AAA was economically resilient, possessed attractive cash flow dynamics, and represented a fragmented market segment that was ripe for consolidation, THP ultimately convinced the founders that an institutional partnership could enable the company to pursue larger acquisitions and expand more aggressively. As a result, THP and it affiliates made a controlling investment in AAA and a growth capital investment in ACE in 2015.

Post-closing, Trinity Hunt worked in partnership with the founders, Ben Lange and Dustin Miller, to implement its Value Creation Plan which transformed AAA into the third largest remarketer of used automobiles through (1) add-on acquisitions of respected independent auctions in large markets; (2) select greenfield developments of new auctions (3) expanded services offerings such as reconditioning capabilities; (4) pricing optimization to enhance margins; and (5) and the implementation of digital auction platforms to complement the company’s in-lane remarketing capabilities.

During its investment period, AAA successfully expanded from 11 to 23 auction locations and extended its geographical footprint from 7 to 15 states. These initiatives resulted in a doubling of unit volume and a 3-fold increase in EBITDA. Similarly, ACE grew its footprint from 5 to 14 markets served and enhanced the customer experience with the establishment of a dealer portal. These efforts led to a 3-fold increase in ACE’s loan portfolio and a 6-fold increase in earnings.

THP’s partnership with management fulfilled our collective vision of building AAA and ACE into leading players within their respective sectors. In late 2021, AAA and ACE were sold to XLerate Group, an auction service provider backed by Brightstar Capital Partners, which generated an extremely attractive outcome for all the stakeholders, including the founders, the employees, and THP’s investors.